Suddenly, the U.K. electric industry holds more than academic interest for U.S. utilities. Up to now, it did not appear that many American utility executives had studied the British privatization. But the ongoing attempt at takeover of the U.K.'s South Western Electricity (SWE) by its American counterpart, The Southern Co., ups the ante considerably. If it comes to pass, Southern's acquisition of SWE will tap directly into the U.K.
American Electric Power
The Federal Energy Regulatory Commission (FERC) Mega-NOPR1 covers four topics:
1) The FERC's jurisdictional powers to implement wholesale open access
2) The FERC's proposal for electric utilities to recover "legitimate and verifiable stranded costs" from departing wholesale customers (a small fraction of all stranded investment), and its belief that states should ensure recovery on retail bypass (the much larger share)
3) A range of measures to implement
a comparable cost. But what, exactly, are those "different uses"?
The Federal Energy Regulatory Commission (FERC) has set for hearing issues related to a proposed, open-access transmission tariff for point-to-point service in Citizens Utilities Co.'s (CU) Arizona service territory. It also approved CU's agreement requiring a transmission customer, Aha Macav Power Systems, Inc., to pay a $190,000 contribution in aid of construction (CIAC) to interconnect to CU's grid (Docket No.
Sherrie Rutherford was named v.p. and general counsel of NorAm Gas Transmission, the pipeline and gas marketing subsidiary of NorAm Energy Corp. She succeeds Dale Earwood, who was promoted to president, NorAm Field Services.
MCN Corp. named Thomas J. Connelly director, investor relations. He previously was director, project finance.
Michael R. Weber was named manager, environmental affairs, for CMS Generation Co., the independent power subsidiary of CMS Energy Corp.
The electric power industry lies in the midst of major change, including a shift to market-based wholesale prices. Market players and regulators will recognize that competition requires a shift in thinking on key issues such as resource planning before the market is developed enough to provide adequate price information.
On December 12, 1994, Craven Crowell, chairman of the board of the Tennessee Valley Authority (TVA), issued two well-publicized announcements. First, TVA would not finish three of the nuclear units it has had under construction since the 1970s, unless it could find partners willing to share their construction costs (a prospect he subsequently characterized as "very slim,").1 Second, TVA planned to set an internal cap on its total debt at a level $2 to $3 billion below the $30-billion limit imposed by the Congress.
The pending merger of El Paso Electric Co. (EPE) and Central and South West Services, Inc. (CSW) keeps going and going and going. But the issue of "comparability" has yet to be left in the dust. And so another landmark case looms large, giving the Federal Energy Regulatory Commission (FERC) another opportunity to shape future wheeling and merger transactions.
Power-supply costs and nonproduction operation and maintenance (O&M) costs differ markedly, both between regions and between utilities within regions. In an open market, only companies with a competitive cost structure will be able to compete effectively.
High costs reflect high embedded costs; above-market, long-term coal-supply and power-purchase contracts; and relatively high nonproduction O&M expenses.