LG&E

LG&E?s Don Santa: Choice in a Low-Cost State

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.

NEV?s Mike Peevey: Meters Make the Market

AS NEW ENERGY VENTURES, LLC EXPLAINS IN ITS PROMOtional literature, it took a long time in California for electricity competition to move from the category of "wacky idea" to widespread acceptance.

But that was before the California electric market opened in April, and before NEV had formed its New Energy Buyers' Alliance, a consortium of clients for whom NEV buys wholesale energy. The alliance includes associations like the California Retailers Association, Western Growers Association and the Independent Colleges of Southern California.

People

THE board of trustees for Con Edison named James P. O'Brien general auditor. O'Brien joined Con Edison in 1972 after serving in the U.S. Navy. He will replace Lawrence F. Travaglia who is retiring.

Consolidated Natural Gas Co. named Elena C. Mola vice president, Latin America/Europe, of its subsidiary CNG International.

Siemens Power Transmission and Distribution named David Johnson vice president of its distribution automation division.

The Energen board of directors announced two promotions.

Scheduling Coordinators: Market Fears and Profit Margins

WHAT IS A SCHEDULING COORDINATOR?

At least 33 organizations know the answer to that question in California because by late last year that's how many SCs had filed to act as go-betweens to the independent system operator.

Although the definition varies depending on who's asked, an SC is simply a preschedule and dispatch office. An SC puts a power schedule together for itself or for energy service providers a day ahead or hour ahead.

Inside Washington

USE OF U.S. ECONOMY UPHELD FOR EQUITY CALCULATIONS

The Federal Energy Regulatory Commission, in seven rate cases involving interstate natural gas pipelines, has upheld a new policy on the appropriate long-term growth rate to be used in computing their return on equity. Five of the pipelines contested FERC's new policy, as announced in Opinion 396-b.

The Commission defended the rate-setting method, but decided to allow the pipelines a chance to prove why the rules should not apply to them. The contesting pipelines are: Trailblazer Pipeline Co. (Docket No.

Electronic Trading: Toward a Mature Power Market

A MASSIVE, WORLD WAR I-era building in downtown Baltimore houses Constellation Power Source, an unregulated, wholly owned power-marketing subsidiary of Baltimore Gas and Electric Co. Upon introducing the new company in February, BG&E announced that Goldman Sachs would serve as "exclusive advisor" for the start-up.

Later, when asked to clarify the relationship between the two companies, Charles W.

What's a Power Plant Worth

"Spark spread" sets value, but as prices diverge from system

lambda, merchant plant buyers will be flying blind.

Many power plants will be bought and sold in the next decade. Some utilities will divest power plants as required by regulators; others will sell for strategic reasons. Most of the plants sold likely will become merchant plants, with no guaranteed market for their electric output. Merchant plant activity is already significant and growing. The value of these plants will depend on how well they can perform in an uncertain market.

KU Energy, LG&E Would Merge

KU Energy and LG&E Energy have announced a merger agreement that could save the companies more than $760 million over 10 years and result in a rate cut of almost 2 percent for each of the next five years.

KU Energy, the parent company of Kentucky Utilities Co., and LG&E Energy, the parent of Louisville Gas & Electric Co., on May 21 announced the agreement to merge into a new holding company called LG&E Energy. The transaction is valued at more than $3 billion, with the combined companies holding assets of more than $4.7 billion.

Does Activity-Based Cost Management Have Any Relevance for Electricity?

When viewed as serving market segments, utilities differ little from manufacturing companies, where most costs are shared among products and processes.

Activity-based cost management has had a tremendous impact on manufacturing enterprises; and its use has spread to some service industries such as banking, insurance and health care. ABCM encompasses two well-known management concepts: activity-based costing and activity-based management. Now that electric utilities are gearing up for competition, it is time to ask if ABCM has any relevance in the public utility industry.

People

Central Vermont Public Service Corp. hired former Electrolux Corp. CFO Douglas D. Sinclair as its marketing and business development v.p. and general manager. In addition to his new position, Sinclair will oversee day-to-day activities at two power generation and technology subsidiaries. Also at CV, Robert G. Clarke, president of Vermont Technical College, and Patrick J. Martin, president of America's Customer Operations at Xerox Corp., were elected to the board of directors.

John F. Cotter, former PECO Energy Co. power trader, was hired by Pennsylvania Power & Light Co.