BPA

MANY PLAYERS IN THE ELECTRIC INDUSTRY HAVE COME to believe that energy-only prices will soon replace the hundred-year tradition of pricing both energy and capacity.

This idea, sometimes called "monomic" trading, offers a seductive simplicity. Even so, research indicates that it is unlikely to work well.

First, consider some terminology. Traditional electric markets contain prices for both energy and capacity. Energy prices pertain to the actual kilowatt-hours. Capacity prices pertain to the right to take energy.

AT Washington Water Power, Bobby Schmidt was appointed director of the company, and Paul A. Redmond announced his retirement as chair and CEO. Redmond started with the company in 1965. Previously, Schmidt worked as an independent trader in Chicago.

MDU Resources Group Inc. has promoted Martin A. White from senior vice president, corporate development to president and CEO. White, who has been with the company since 1991, will replace retiring president H.J. Mellen Jr.

Robert L. Goocher was promoted to president of AGL Resources Service Co. from executive vice president and COO.

Subsidies? Maybe. But how about reciprocity? Should Congress let PMAs, munis and co-ops decline open access?

Until recently, most congressional debate on utility deregulation has focused on the future of investor-owned utilities and independent power producers and marketers. Lobbyists for government-owned or cooperative-owned power companies have tried to downplay their clients or to seek exemptions.

Moody's Investors Service has released a report that finds the most significant long-term implication of Order 888 for investors is for potential divestiture of transmission assets by investor-owned utilities.

The Moody's study, FERC Order 888 and Wholesale Competition: Catalyst for a New Market Model, also finds that divestiture by a vertically integrated utility may leave bondholders secured by a lien on relatively risky generating assets of often questionable market value, as opposed to the presently more diverse and balanced asset portfolio.

California's three largest investor-owned electric utilities have submitted their proposals to the Federal Energy Regulatory Commission for implementing an independent system operator and power exchange for the state's restructured electric industry (Docket Nos. EC96-19-001 and ER96-1663-001).

Last November, the FERC had conditionally approved an "acceptable framework" submitted by Pacific Gas & Electric Co., San Diego Gas & Electric Co., and Southern California Edison (the trustee for the ISO and PX is S.

Robert Blohm and Professor William Hogan recently traded op-ed letters in the Wall Street Journal on the "poolco" and "bilateral" models for wholesale power markets:

Writing first, Blohm (an advisor to Ontario's Macdonald Committee on electric competition) praised bilateral trading (individual buyers and sellers agree on price).

A control area is like an airport (em too many planes, not enough runways.

SAN FRANCISCO, CALIFORNIA, AUGUST 21, 1996 - 8:35 A.M.

On Saturday, Aug. 10, 1996, a power outage left more than 4 million Californians without electricity, prompting the California Public Utilities Commission to conduct emergency hearings. Witnesses appeared from electric utilities and a host of federal and state agencies, including the Bonneville Power Administration, the U.S. Department of Energy, the Federal Energy Regulatory Commission and the Western Systems Coordinating Council.

Bonneville Power "Subscriptions" Seen Among Sticky Issues

A panel of governors in the Pacific Northwest expects to issue a plan this month that proposes a restructured Bonneville Power Administration, primed for the regional free-market electric economy.

The panel would act on a steering committee report that resolved pressing energy matters in the Northwest. But the committee report left open other issues that some say could leave the BPA's future in doubt.

With its new agreement with the Bonneville Power Administration (BPA), power aggregator New Energy Ventures, Inc. (NEV) stands poised to enter California's retail market with the advent of competition.

NEV has agreed to purchase 200 megawatts (Mw) of surplus electricity from BPA for five years beginning January 1, 1998, with an option for an additional 200 Mw of surplus firm power for five years from the time the option is exercised. NEV also will purchase seasonal economy power, which sells for less than 1.5 cents per kilowatt-hour.

But which one?

And how to adjust for different delivery points?FOR THE PAST 20 YEARS, THE WESTERN

Systems Coordinating Council (WSCC) has built a reputation for innovation in electric markets.