General Motors

BY WHAT AUTHORITY CAN STATES FAVOR RENEWABLE

energy in a restructured electricity market?

Renewable resource funding marks a major point of contention in utility deregulation. Environmental groups fear that without some form of compulsion or subsidy, or both, renewable resources will not survive in an energy economy based on least direct consumer cost. However, utilities do not want to be saddled alone with the chore of carrying all renewables to market.

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.

Sound bites from state and federal regulators.

Electric Exit Fees. New Jersey board exempts General Motors Corp. from any exit fees imposed in the future to collect electric utilities' stranded costs, in connection with GM's plans to build a $2.2-million gas-fired cogeneration facility (PURPA-qualified) at its Linden auto assembly plant. GM said it had checked all laws and regulations and had found no current obligation to pay exit fees. Docket No. ET96090669, June 24, 1997 (N.J.B.P.U.).

Residential Gas Rates. Arkansas OKs settlement allowing Arkansas Oklahoma Gas Corp.

Jay L. Witkin replaces Jerome Feit, who retired, as the Federal Energy Regulatory Commission's solicitor. Also at the FERC, Judith Ann Dowd will serve as an administrative law judge. Dowd joins the FERC from the National Labor Relations Board.

PacifiCorp hired John Carr as assistant v.p., global industrial sales. Carr joins PacifiCorp from Direct Services Industries, where he served as an executive director.

Melissa L. Reese was hired by CMS Marketing, Services and Trading as a natural gas trader. CMS Marketing is the energy marketing unit for CMS Energy Corp.

New legislation would tackle the most difficult problem (em low load factors for small-volume customers.

We commend the Natural Gas Competition and Deregulation Act, SB 215, passed by the Georgia General Assembly in March. (Governor Zell Miller was expected to sign the bill in April.) The Georgia legislation envisions a new framework for regulating the retail gas market.

The U.S. Supreme Court in late February ruled that it is constitutional for Ohio to impose a 5-percent use tax on purchases of natural gas from an out-of-state natural gas marketer, when the same purchases would have been exempt from tax had the purchaser bought the gas from an in-state local distribution company.

Nicholas Bush, Natural Gas Supply Association president, expressed disappointment with the decision and called it a setback for development of a national, competitive natural gas marketplace.

About a year ago I stuck my neck out to predict that electric utilities might end up with stranded investment in transmission lines. I suggested that financial commodities trading-longs, shorts, and hedges-might supplant physical product movements. It's happened in natural gas, where the interstate pipelines have suffered from "decontracting" and capacity "turnback"-a phenomenon that has tended to move from West to East.

The battle to control profit margin really boils down to a battle for the customer premises, where the serious money resides.The gas and electric industries in the United States control about $900 billion in assets (production, logistical, merchant). They employ these assets to serve about 150 million customers (counted separately for gas and electric), but they manage to offer only two rudimentary products (em molecules and electrons (em and at only two levels of service: firm (supposedly) and interruptible (obviously).

The Federal Energy Regulatory Commission (FERC) has set for hearing a complaint by the Municipal Electric Utilities Association of New York (MEUA) against one of its members (the Town of Massena) and the New York Power Authority (NYPA). The complaint alleges that NYPA improperly agreed to sell low-cost hydroelectric power to an industrial customer, violating the Niagara Redevelopment Act as well as a FERC license assigning statutory preference to municipal utilities (Docket No.

California's retreat from its zero-emission targets eases the pressure on utilities, making time for a fresh look at public and private efforts.

Electric vehicles (EVs) hold interest for utility companies around the world.