Commission

Southern California Gas Co. (SoCalGas) has taken issue with the coal industry's opinion that lower electric rates from restructuring would increase electricity use, and that strict environmental regulations would require meeting the increased demand with out-of-state generation.

"These coal industry groups suggest that electricity demand will rise because cheap coal-fired electric power (em generated in Arizona and elsewhere (em will now be available," said Lee Stewart, a SoCalGas senior vice president.

Citing the ongoing Competitive Opportunities Proceeding as well as recent public statements by New York Public Service Commission (PSC) chairman John O'Mara, Fitch Investors' Service predicts that New York will aggressively approach electric industry restructuring.

Fitch believes electric utility bondholders could be adversely affected by PSC policies that order less than full stranded-cost compensation, establish penalties to force disaggregation, or provide bailouts that transform weak companies into strong competitors.

The Maine Public Utilities Commission (PUC) has released for comment its Draft Plan on Electric Industry Restructuring, which would allow all retail customers to choose their generation supplier beginning in January 2000. The draft permits customers to aggregate, and does not require reciprocity based on retail access in other states or Canada.

Investor-owned utilities (IOUs) would have to structurally separate generation by January 2000, and divest all generation assets by January 2006.

Attorney Edward L. Flippen insists it "doesn't take an economist to figure out" what will happen to electricity prices in a restructured industry that provides for open access and retail wheeling ("Radical Restructuring? Not in My State," Perspective, August 1996, p. 11).

Forgoing an economist, Flippen predicts that electricity rates will reach a national equilibrium point substantially higher than rates currently prevailing in Virginia but below rates in California.

I was surprised that the news item "N.Y. Issues Electric Restructuring Plan" (Courts and Commissions, 7/15/96, p. 45) neglected to mention one of the most significant aspects of the restructuring order at the New York Public Service Commission (PSC). In its May 20th order, it adopted the goal of wholesale competition by early 1997, and retail access by early 1998.

As the PSC stated: "A main benefit of setting a timetable is that it would give parties a goal and expectation that should move the process along.

Ronald L. Adams, an executive from Transcontinental Gas Pipeline, was named president of CNG Transmission Corp. He replaces L.J. Timms, Jr., who retired.

Lee Elder was hired by GE Nuclear Energy as manager of market development. Elder was g.m. of nuclear marketing and technology for Black & Veatch and started a joint venture between the two companies to service boiling water reactors.

The Oklahoma Corporation Commission has hired Richard L. Heck, a former U.S.

Labor Day found me trudging around in one of those "big box" discount stores, looking for a sale on a new refrigerator. Out West, California lawmakers spent the holiday putting together their own discount plan (em this one promising rate cuts for the state's residential electric consumers, funded by "rate reduction bonds" backed by a state-owned bank for economic development.

Either way you cut it, the holiday proved worthy of its name.

not a grab for power.

The jurisdictional issues posed by Order 888 continue to breed tension between federal and state officials. Unfortunately, most of this tension too often elevates form over substance. This jurisdictional tension shifts the focus of decisionmaking from securing the benefits of competition to preserving regulatory turf.

Some shareholders do find bottom-line value

in a "marriage of convenience."

With six merger and acquisition (M&A) deals announced between May 1995 and January 1996, and three more so far this year, the long-predicted consolidation of the electric utility industry is taking hold. At least 23 utilities, with business-combination transactions pending, are part of the frenetic domestic M&A activity that has swept the industry.

Marriage of convenience eyes retail market.

By Richard S. Green and J. Michael Parish

Enron's proposed entry into the electric energy business is a "wake-up call." Open competition will continue to accelerate, and new, aggressive players will seek ways to become involved as the energy and energy services businesses converge.

A combined Enron/Portland General Corp.