The North Carolina Utilities Commission has approved the proposed $7.7-billion merger of Duke Power Co. and Houston-based PanEnergy Corp. to form Duke Energy Corp., subject to conditions designed to protect North Carolina ratepayers from potential adverse effects.
The commission said the merger must ensure that ratepayers of the new company receive no fewer benefits than ratepayers in other jurisdictions.
Georgia Gov. Zell Miller has signed into law the "Natural Gas Competition and Deregulation Act," which unbundles natural gas services and opens residential gas markets to competition.
Under S.B. 215, in less than three years Atlanta Gas Light Co. and its affiliates, Georgia Natural Gas and Savannah Gas Co., no longer will sell natural gas directly to end users. Instead the companies only will provide delivery service.
PECO Energy Co. has asked the Pennsylvania Public Utilities Commission to approve its securitization request and reject a recommendation by an administrative law judge that the PUC not allow PECO to recover stranded costs from ratepayers.
On Jan. 22, PECO asked that it be allowed under the state's new electric competition act to refinance $3.6 billion of its electric generation assets through securitization. But on April 14, Judge Louis Cocheres recommended against the proposal. (See Pa PUC Docket No.
Do mergers and "critical mass" really make a difference? The answer, it seems, is yes.
To become more competitive, U.S. electric utilities have embarked on a quest in recent years to improve operational efficiency and factor productivity. The question is: Are utilities making progress? And, which companies have gained a competitive edge? Which have not?
Industry analysts have long argued that given the structure of the markets they serve and their cost-based, rate-setting procedures, electric utilities tend toward monopolistic behavior.
Too many rules can make any plant uncompetitive.
Now, more than ever, the commission must weigh
the costs when it looks at health and safety, decommissioning and antitrust impacts. Nuclear assets seem to pop to the surface wherever one looks for causes behind the current upheaval in the U.S. electric utility industry. The nuclear experience (em with its costly prudence reviews so prevalent during the 1980s (em has helped fuel a major shift in attitude.
Senior utility managers have now come to accept fundamental changes in the electric industry.
"People are starting to talk about ISOs on the gas side." So says Jerry Pfeffer, lay advisor on energy industries for Skadden, Arps, Meagher & Flom, the New York law firm well known for its work in mergers and acquisitions.
Pfeffer's comment alludes to events now unfolding in Southern California, that fount of fashion, where each round of "deregulation" only doubles the ante in billable hours. This time it's natural gas pipelines. Do they have market power too?
"It Would Not Surprise Me"
Southern California Edison Co. has now alleged that Southern California Gas Co.
The California Public Utilities Commission elected members to two boards overseeing energy efficiency and low-income programs. The board for energy efficiency programs members are: Acting Chair Sara Steck Myers, CEERT; Dave Gamson, CPUC commissioner advisor; Michael Messenger, California Energy Commission; Peter Miller, Natural Resources Defense Council; Mark Thayer, San Diego State University; Ortensia Lopez, Greenlining Institute; Charles Goldman, Lawrence Berkeley Laboratory; Michael Shame, UCAN; and Don Schultz, CPUC Office of Ratepayer Advocates.
Authors lost their case. The bright line is preserved.
Unfortunately, PUBLIC UTILITIES FORTNIGHTLY did not caution its readers that a recent article ("Gas Pipelines and the Hinshaw Amendment: Conflicts Loom as the 'Bright Line' Fades Between Federal and State Jurisdiction," April 1, 1997, p. 36) is actually a thinly disguised brief for claims that a series of tribunals has rejected, including the U.S. Supreme Court. A warning from the editors would have saved valuable time for readers searching for more substantive coverage of the utility industry.
In the electric industry restructuring debate lurks an important issue: If utilities recover some level of stranded costs, how do you design a cost recovery mechanism that minimizes stranded costs? This issue is important because, among other things, it will affect total customer savings.
One way to encourage utilities to mitigate stranded costs is to allow recovery of only a portion of costs. For instance, the California stranded cost recovery mechanism provides utilities with a "fair opportunity" to recover all of their stranded costs.
The New Jersey Board of Public Utilities has issued its final master plan on electric restructuring, which could cut electric rates by 10 to 15 percent starting October 1998. The plan allows all customers to choose electric suppliers by July 2000.
The board now will submit "Restructuring the Electric Power Industry in New Jersey: Findings and Recommendations" to the governor and Legislature.
The plan would phase in retail choice, beginning with 10 percent of all residential, commercial and industrial customers, in October 1998.