Resolving a new issue now arising under fuel cost adjustment clauses, the North Carolina Utilities Commission has ruled that electric utilities who buy wholesale power from marketers should treat 75 percent of the energy price component as a "fuel cost," in those instances where the seller cannot or will not provide actual fuel cost data.
The case involved Duke Power Co., which had purchased power from Enron for resale.
Your article in the July 1, 1997 issue of PUBLIC UTILITIES FORTNIGHTLY regarding co-ops and competition was very much on target ("Co-ops and Competition: Still a United Front?" p. 16). Our firm spends a significant amount of time providing financial advice to some of the more progressive rural electric cooperatives and have had some association with a few of the organizations mentioned in your article.
We are strongly pro-cooperative. Co-ops continue to provide high-quality electric, gas and other services to significant numbers of Americans, both rural and urban dwellers.
More low-cost states seen joining the move toward electric restructuring.
Six months ago, those states with the highest electric prices appeared the furthest along on the path to electric industry restructuring. That is no longer the case.
Today, even those states that can boast of lower-than-average rates are exploring avenues toward more competition, as shown below. The table groups states into five tiers, by the level of activity to date. These activities include initiatives by legislatures, regulatory commissions, utilities and other parties.
As one of the early voices in the "reliability debate," urging all of us not to lose sight of the importance of reliability of electric bulk power supply (see, for example, my article in the Oct. 11, 1990, issue of PUBLIC UTILITIES FORTNIGHTLY, on the occasion of the 25th Anniversary of the Northeast Blackout of 1965), I applaud the FORTNIGHTLY for sponsoring a forum on "Reliability, Transmission and Competition" in its June 1, 1997 issue (p. 45). By doing so, your magazine has provided an important public service.
When the fanfare dies down, winners face the same challenge as with any new start-up but may enjoy more options than incumbent licensees.
The Federal Communications Commission's auctions of spectrum should concern two types of energy utilities: those who participate in the auctions and those who don't.
Initially, these auctions were viewed as a spectacular new regulatory tool (em able to raise billions of dollars for the public, without troubling the overburdened taxpayer. As of late, however, a dark side has emerged. Bidders have cried fraud.
The Nuclear Regulatory Commission has issued a final policy statement on its intended approach to nuclear plant licensees as the electric industry moves toward greater competition.
While the NRC has concluded that its regulations can address future changes, it is considering revising its financial and assurance requirements for decommissioning funds.
(And why power plant buyers may follow suit.)
"WINNERS' CURSE" IS IMPORTANT TO THE UTILITY ASSET AUCTIONS. Winners' Curse is the tendency for the "rookies" and the wide-eyed visionaries to overbid in auctions with uncertain valuations.
The spectrum auctions at the Federal Communications Commission reveal the Winners' Curse even in the more "successful" rounds, despite the agency's elaborate precautions.
FCC's 14 spectrum auctions booked almost $23 billion in license fees (em almost $10 billion in broadband personal communications services (PCS).
Six out of eight members of the New York Power Pool have asked the Federal Energy Regulatory Commission to approve a request to provide electricity, installed capacity and ancillary services at market-based rates in the state's restructured market.
Included in the Aug. 15 filing are market power analyses for individual members and a plan for monitoring the proposed New York ISO. According to the utilities, the analyses demonstrate that the market under the proposed industry structure will be workably competitive. They also support the market-based rate proposal.
THE FERC TAKES SUGGESTIONS ON THE FUTURE OF THE GAS INDUSTRY.
Earlier this year, the Federal Energy Regulatory Commission opened a discussion of issues facing the natural gas industry. Its aim? To set "regulatory goals and priorities" for the era following from Order 636, issued in 1992. %n1%n
To gather input, the FERC scheduled a two-day public conference. It asked for comments on a myriad of topics, ranging from cost-of-service rates to hourly gas pricing and services.
Campaign for a Prosperous Georgia has asked the United States Court of Appeals for the Eleventh Circuit to reconsider and vacate orders by the Securities and Exchange Commission allowing Southern Co. to move forward with investments in foreign companies.
CPG claims that the SEC should have denied the utility's request to acquire foreign utilities using financing and guarantees of more than 50 percent of retained earnings. The company claimed that such acquisitions violate "safe harbor" limits. The filing points to the recent agreement by Southern Co.