Edison Electric Institute

Public power is competitive power, and that keeps IOUs on their toes.

There they go again. You know who I mean, the critics who fear us in a competitive electric utility environment, or who oppose, for ideological reasons, government involvement in the power business.

Charles E. Bayless, in his article "Time's Up for Public Power" (Public Utilities Fortnightly, July 1, 1998), offered up just the latest of these below-the-belt blows.

It's tempting to respond in kind to these critics. Why? Because they torture the facts and distort the record.

Shaky merger policy finds the FERC at war with itself.

"IN HIS DELIGHTFUL ARTICLE, "THE FOLKLORE OF Deregulation," published this summer in the Yale Journal on Regulation, federal judge Richard Cudahy notes the ethereal nature of "virtual electricity." This new product, he explains,"exists only as a blip on a computer screen and will never give one a shock." "Reality," he notes, has "retreated to the money part of the system."

We could use a dose of that reality in looking at electric utility mergers.

No clear consensus has emerged. Should regulators hold to a hard line?

Regulators have wrestled for decades with transactions between vertically integrated monopoly utilities and their corporate affiliates.

Most problems have usually involved a shifting of costs, risk, or profit, as when an electric utility buys coal from a subsidiary. On the telephone side, AT&T's equipment dealings with Western Electric and Bell Labs were always a worry for regulators.

THE BOARD OF DIRECTORS of Virginia Power elected James A. White to the position of senior vice president, human resources. White previously served as senior vice president, human resources for the investment management group of Cigna Corp. He will replace Tom O'Neil, who retires after a 33-year career with the company.

Sen. Frank Murkowski (R-Alaska) announced the appointment of Tina Kreisher as communications director of the Senate Committee on Energy and Natural Resources. Kreisher previously served as deputy director of the Washington d.c. office of Gov.

SEVERAL YEARS AGO, ENGINEERS AT AMERICAN ELECTRIC Power measured the transfer capability or transmission capacity (in this article we will use the terms interchangeably) between AEP and Commonwealth Edison. Using traditional methods, they found that the winter transmission capacity that year was 3,500 megawatts.

Then they performed a more exhaustive and nonstandard analysis. It showed that during the month of January, transmission capacity actually varied from a low of 1,600 MW (less than half the nominal amount) to a high of 6,000 MW (70 percent higher than nominal).

Did you hear the one about the utility dispatcher who downed one too many and paid too much for power? He said his system was loaded.

But his customers weren't. To learn more, I refer you to Kati Sasseville, the recently, though only somewhat, retired general counsel of Otter Tail Power Co., who believes that she and other colleagues at her former company have discovered something that everyone else has overlooked. The story begins in 1924, when Allegheny Power and Philadelphia Electric became the first utilities in the country to interconnnect their lines.

DEREGULATION PRESENTS WHAT IS PERHAPS THE BEST opportunity yet for renewables to stake a lasting claim in the electricity market.

Since most energy from renewable sources still isn't priced competitively with fossil-fueled technologies, many restructuring proposals at state and federal levels include various support mechanisms intended to drive down the renewable generation costs. The initial added expense is a necessary trade-off, advocates say, for the resulting reductions in emissions and energy price volatility.

IN APRIL 1997, AFTER FOUR YEARS AS A COMMISSIONER WITH the Federal Energy Regulatory Commission, Donald F. Santa, Jr. announced that he would leave the public sector at the expiration of his term and join LG&E Energy Corp. as vice president and deputy general counsel. Included among his first assignments at LG&E was management of legal matters for LG&E Marketing, the national energy marketing subsidiary of LG&E Corp.

FOILING EXPECTATIONS OF BOTH SUPPORTERS AND detractors, the Clinton Administration's proposed electric restructuring legislation offered no new policy on carbon-dioxide emissions, such as a cap-and-trade program similar to that already in place for sulfur dioxide.

But don't breath a sigh of relief. The debate has only begun.

Many observers see the Administration's tactics on CO2 as an obvious attempt to sidestep a highly sensitive political issue. They appear to agree that at some point the Administration must confront CO2 emissions.

LAST YEAR, IN JUSTIFYING THE PROPOSED NEW NATIONAL AMBIENT Air Quality Standards (NAAQS) for particulate matter and ozone, Environmental Protection Agency Administrator Carol Browner testified that: "During the 1990 debates on the Clean Air Act's acid rain program, industry initially projected the costs of an emission allowance¼ to be approximately $1,500¼ Today those allowances are selling for less than $100." %n1%n

Later in 1997, at the White House briefing announcing President Clinton's Global Climate Change Plan, Katie McGinty, chairwoman of the Council on Environmental Quality, sa