Minnesota Coalition Joins Debate
A broad coalition of Minnesota electric cooperatives, municipal utilities, consumer advocates, and environmentalists has joined the debate over the restructuring of the state's electric industry.
Law & Lawyers
TEP's Holding Co. Status on Hold
The staff of the Arizona Corporation Commission have recommended rejection of a Tucson Electric Power Co. (TEP) proposal to form a holding company, with TEP becoming a wholly-owned subsidiary. The proposal reflects TEP's desire to pursue opportunities in the domestic and international power markets, including development of independent power projects, acquisition of interests in existing power facilities privatized by foreign governments, and construction of cogeneration facilities to serve the energy needs of large industrial customers.
Mortgaging Your Conservation: A Way Out for Stranded Investment?Andrea L. Kelly and Donald E. Gaines
When an electric utility invests in a resource to serve its customers, it does so with the belief that the asset underlying the investment can be pledged as collateral to secure debt capital. But what happens if the asset is not owned by the company and, therefore, provides no collateral? The following situations illustrate:
Situation A
Electric utility "A" chooses to build a small generating plant to meet the future needs of its growing customer base.
Commentary: Making Restructuring ProfitableRalph Cavanagh
Investments that minimize life-cycle costs of reliable energy services should be more profitable to utilities than those that fail that test. This perceptive article shows that Puget Power and the Washington Utilities and Transportation Commission (UTC) share that view.Too many utilities still hesitate to finance energy savings that cost less than the displaced power production.
Utility Finance After the TransitionJames T. Doudiet, John Higley, and Patricia Eckert
DOUDIET:Stranded investment has overshadowed other financial issues in the transition to a competitive electric utility industry. For example, what will post-transitional companies look like? Will they attract growth-oriented investors?
Utilities as monopolies enjoyed unparalleled access to the capital markets because price was based on cost. That structure assured the ability to raise funds under any and all circumstances, but it created an atypical industry.
Mandatory Wheeling: Is the FERC Overstepping its Bounds?Donald B. Craven and Anthony F. Shelley
In its recent Notice of Proposed Rulemaking (NOPR) on wholesale competition and open-access transmission,1 the Federal Energy Regulatory Commission (FERC) has outlined a plan to revolutionize the electricity industry.
Electric Restructuring: NOt by FERC AloneVito Stagliano
The restructuring of electric utilities is fundamentally a matter of national policy (em not a regulatory issue. Regulators are ill-suited to make national policy because they are conditioned to act within the limits of authority specifically granted by legislation, rather than to seek a fresh statutory mandate in response to changed conditions. Policymakers must assess political, social, economic, technological, regional, and national factors to measure the need for reform.
Utilities to Pool Power, Resources
General Public Utilities Corp. (GPU) and New Jersey Resources Corp. (NJR) have announced a pooling plan to manage the natural gas supply and capacity portfolios for up to 25 gas-fired generating stations that supply the GPU system in New Jersey and Pennsylvania. The pool will contain up to 1,100 megawatts of nonutility generation presently under contract with the GPU companies, as well as the companies' own generation. NJR will procure gas and provide other fuel-management services in conjunction with GPU system power dispatchers.
Mailbag
Nice Try!American Gas Association president and CEO Michael Baly's response to my article ("Electric Reliability: How PJM Tripped on Gas-fired Plants," May 1, 1995) concerning the January 19, 1994, rolling blackouts in the PJM power pool is damage control that fails. Here are the facts that Mr. Baly either ignores or distorts:
Forty percent of PJM's coal generation did not operate during the rolling blackouts. At least 80 percent of PJM's total generation where gas was the primary or sole fuel did not operate when needed.
Improving Competitive Position with Natural Gas Storage
On a cold day, natural gas from storage reservoirs may supply as much to markets as gas from producing wells. The ability to store gas underground not only ensures reliable delivery during periods of heavy demand, but also allows more level production and pipeline flows throughout the year. Thus, some believe that the cost of storage should be spread over all gas delivered during a year, not just gas delivered from storage sites to end-use customers during the winter.