California Public Utilities Commission

Pacific Gas and Electric Co.'s announcement that it wants to increase energy rates by almost $1.2 billion was met with outrage by consumer watchdog organization The Utility Reform Network.

Pacific Gas has notified the California Public Utilities Commission that it plans to file a 1999 general rate case to raise natural gas rates by $506 million to maintain gas pipeline safety and reliability. It also plans to increase electric base level rates by $703 million beginning Jan. 1, 1999 to improve service reliability.

Competition draws Christians, conspiracy theorists.

SO, WHO WANTS TO COMPETE AGAINST THE LOCAL UTILITIES? In most of the country, potential competitors tend to fall into three categories: (1) traditional utilities from within or nearby the affected state that wants to expand into foreign service territories; (2) unregulated subsidiaries of traditional utilities; or (3) power marketers and/or aggregators. In California, however, it's more of a mixed bag.

The California Public Utilities Commission approved a performance-based ratemaking plan for Southern California Gas Co. that could yield substantial savings, which the company is required to share with customers.

The PUC said the proposed merger of the utility's parent, Pacific Enterprises, and Enova Corp., parent company of San Diego Gas & Electric Co., should improve efficiency and benefit ratepayers.

The California Public Utilities Commission has approved "Gas Accord," a settlement that enhances competition by restructuring the way natural gas is bought, sold and transported (Decision 97-08-055, Docket A.92-12-043).

"This is a landmark step to further deregulate the natural gas industry here in California," said Jack Jenkins-Stark, PG&E senior v.p. "These changes parallel those in the electric industry."

The collaborative settlement unbundles rates for transporting natural gas on PG&E's system.

The California Public Utilities Commission issued its final order on unbundling rates for generation, transmission and distribution functions performed by the state's three largest investor-owned utilities on Aug. 1.

The commission also determined how to calculate transition costs and addressed customer billing and education issues. (Decision 97-08-056, Docket A. 96-12-009 et al.)

The utilities affected are Pacific Gas and Electric, San Diego Gas & Electric, and Southern California Edison.

Rates by Function.

Let me tell a story. A consultant I know works as the lead negotiator for a Native American tribe that sells fuel to electric generating plants. On occasion he visits the reservation to discuss business plans with the tribe, exploring various scenarios for utility restructuring.

Recently, this consultant said he found himself in the ceremonial council lodge, instructing tribal leaders on decision trees and discounted cash flows. When he finished, the younger members conferred briefly in their native language.

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.

To the discomfort of my predilections, I cannot deny that which is just.

In the June 1 issue of PUBLIC UTILITIES FORTNIGHTLY, Ken Rose ("Securitization of Uneconomic Costs: Whom Does It Secure?" p.

Competition abounds at wholesale, but retail is another story.

Will geography, politics and regional economics stand in the way of real choice for electric consumers at the retail level? Consider this tale of two power players.

One competitor, the Indiana Municipal Power Agency, is proud of itself. In its annual report, IMPA says that open access and competition in the wholesale market allowed it to trim wholesale rates for power it delivered to member distribution companies in 1996. "The results were remarkable," the report reads.