At the request of California Gov. Pete Wilson (R) and key state legislators, Southern California Edison (SCE) has forged a consensus with a broad coalition, including electric customers and independent power producers (IPPs), on restructuring principles for California's electric utility industry. According to Thomas Higgins, SCE spokesman, the negotiated settlement represents a breakthrough compromise for the "PoolCo" and "anti-PoolCo" camps that will help prevent a fight in the legislature.

The profound changes now occurring in the electric industry will most directly affect those who are engaged in the enterprises of generation, transmission, and distribution of power. But challenges and opportunities confront gas companies as well. Certainly, the electric industry will continue to influence markets for gas: both in bulk fuel supply and in retail energy.

Who's Tripping?

It requires a truly acrobatic stretch of the imagination to reach the same conclusions as Pennsylvania Commissioner John Hanger in his article, "Electric Reliability: How PJM Tripped on Gas-Fired Power Plants" (May l, 1995). The truth is that the natural gas system performed efficiently and reliably in January 1994, exactly as planned. The operators of the power plants in question purchased interruptible gas-transportation contracts to keep their fuel costs low.

Are utilities working at top productive capacity? A novel look at 19 investor-owned electrics in the Sun Belt.

Major restructuring is expected to hit investor-owned utilities (IOUs) over the next decade. Competitive market forces, in place of rate-of-return regulation, will require many companies to evaluate their resource allocations. No longer will singular adjustments in resource use suffice when both capital and labor resources must be realigned.

The Geneva summit between Ronald Reagan and Mikhail Gorbachev signaled the beginning of the end of the Cold War. With a diminished threat of East-West confrontation, countries throughout the world gradually reoriented their priorities (em away from politico-military security and toward economic development. To paraphrase Woodrow Wilson, the end of the Cold War had made the world "safe for capitalism."Now, 10 years later, with a few notable exceptions in the Balkans and elsewhere, evidence abounds to support that appraisal, from Argentina to Prague to Manila.

Commission (CPUC) moved a tortured step closer to deciding how it will reform its regulation of the

state's electric utilities when it

adopted a Proposed Policy Decision in its proceeding on competition by a 3-to-1 vote on May 24. The Proposed Decision retreats from the free-market approach the CPUC took when it presented its "Blue Book" proposal in April 1994.

A new group, the Independent Power Suppliers of ERCOT (IPSE), has formed to speak for nonutility power suppliers that operate within the Electric Reliability Council of Texas (ERCOT). The stated mission of IPSE is "to promote the reliable operation of power systems within ERCOT, in which a competitive, environmentally responsible and profitable independent electric power industry can flourish." Membership is open to all nonutility generators (NUGs), cogenerators, and power marketers.

In talking to electric utility managers from across the country we have found that most believe direct access will have major repercussions on all aspects of their business by the end of the decade. Not surprisingly, there is an emerging consensus that revenues will drop rapidly as supply options grow for retail customers.

The nonstop dialogue about retail wheeling, power brokers, PoolCos, and restructuring overlooks customers and their increasing thirst for value-added services. Aside from a few emphatic words by some industrial users, little has been said about customer expectations. This article offers a snapshot of the brave new world of energy service marketing (ESM). ESM will take the place of demand-side management (DSM) and electricity marketing, blending the best of both.

ESM is simple.