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Law & Lawyers

In Brief...

Sound bites from state and federal regulators.

Gas Supply Affiliates. Arkansas oks plan by Arkla to continue to rely on NorAm Gas Transmission Co. (an affiliate) for the bulk of its supply requirements, but directs the utility to evaluate its supply options and to "be prepared" to shift to an independent supplier for gas inventory and capacity. NorAm agreed to "rachet-down" its price to meet third-party offers. Docket No. 95-401-U, Order No. 34, Jan. 9, 1997 (Ark.P.S.C.).

Electronic Billing. Michigan regulators approve program by Consumers Power Co.

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NGSA Claims Gas Could Be Hurt By Restructuring

The Natural Gas Supply Association said that electric restructuring bills proposed in Congress and by the Clinton Administration contain several provisions that could "significantly" and "unfairly" reduce the competitiveness of gas-fired electricity.

NGSA warned that utilities likely will dispatch electricity from different fuel sources in order of lowest-to-highest marginal cost, and the marginal costs of gas-fired power generally are higher than power fired by coal, nuclear and hydro.

Byline: 
Lori A. Burkhart
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FERC Conference to Explore Gas Issues

The Federal Energy Regulatory Commission has issued its notice of a public conference on "Issues and Priorities for the Natural Gas Industry," which will be held May 29 and 30. The FERC wants to gather information to establish its regulatory goals and priorities in the post-Order 636 environment (Docket No PL97-1-000).

The FERC is requesting a broad analysis of present and future industry issues, including those deemed the highest priority for FERC action.

Byline: 
Lori A. Burkhart
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Frontlines

Wall Street loves stranded costs. No kidding. For stockbrokers and underwriters accustomed to selling utility issues to widows and orphans, the prospect of asset-backed financing opens a whole new world. I'm talking here about "securitizing" stranded costs.

In a securitization, a trust takes beneficial title to utility assets (tangible or intangible) that have lost their value in the market, and sells "transition bonds" to a new set of investors, funneling the bond sales proceeds back to the utility and to its equity investors. Who pays the coupon? Why, it's the customer of course.

Byline: 
Bruce W. Radford
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Insurance Recovery for Manufactured Gas Plant Liabilities

Valuation, optimization and settlement strategies

oth gas and electric utilities face a variety of environmental issues arising from more than 1,500 former manufactured gas plant (MGP) sites, which supplied a major source of energy in the United States from the early 1800s to the mid-1900s. Using the standard operating procedures of the day, MGPs created and often disposed of byproducts such as coal and oil tars, tar/water emulsions, sludges, spent oxides (including cyanides), lampblack, ash and clinker.

Byline: 
Gayle S. Koch, Kenneth T. Wise, and Philip Hanser
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Dynamic Scheduling: The Forgotten Issue

But not for long (em as power producers and

customers get more creative in matching plants with loads Dynamic scheduling is a "sleeper" issue in the move toward electric competition. Industry players are debating independent system operators. They are focusing on issues of governance and the form of transmission pricing. Consequently, they are ignoring critical issues concerning ancillary services. These services are not receiving the attention they deserve.

Byline: 
Eric Hirst, and Brendan Kirby
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Retail Gas Reform: Learning from the Georgia Model

New legislation would tackle the most difficult problem (em low load factors for small-volume customers.

We commend the Natural Gas Competition and Deregulation Act, SB 215, passed by the Georgia General Assembly in March. (Governor Zell Miller was expected to sign the bill in April.) The Georgia legislation envisions a new framework for regulating the retail gas market.

Byline: 
George R. Hall, and Richard J. Pierce, Jr.
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Pa. Utilities File Pilot Plans

Investor-owned utilities in Pennsylvania have filed their retail electric competition plans with the Pennsylvania Public Utility Commission to comply with recent legislation requiring customer-choice pilots for 5 percent of the peak load of the state's electric utilities.

PECO Energy Co. has filed a proposed electric choice retail pilot program that would allow about 90,000 residential, commercial and industrial customers to choose their electric suppliers as soon as October and no later than January 1998.

Byline: 
Lori A. Burkhart
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New York Adopts Rules for ESCOs

The New York Public Service Commission has adopted eligibility criteria rules for competitive retail energy services companies (ESCOs) seeking to sell electricity in the state.

The state created the March 5 ESCO rules as part of New York's "Competitive Opportunities" proceeding. The rules are consistent with the PSC's May 16, 1996 decision to open markets to wholesale competition in 1997 and to retail competition in 1998. Consumer protections used in the present monopoly environment will be retained during the transition to competition.

Byline: 
Lori A. Burkhart
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Joules

Stone & Webster will lead a consortia building a $109 million geothermal power plant for Amoseas Indonesia, Inc. The project calls for a second and third unit at the Darajat geothermal station, which taps into geothermal fields in the Garut Regency of West Java, Indonesia. Each unit has a capacity of 70 MW. The entire project was set to be finished by early 2000. Stone & Webster's portion of the contract is worth about $40 million.

Westinghouse Electric Corp. contracted to supply a barge-mounted power plant for the Port of Mombassa Power Barge Project in Malaysia.

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