Order No. 636

Zone of Reasonableness

Coping with rising profitability, a decade after restructuring.

With a recent flurry of gas pipeline rate investigations at the Federal Energy Regulatory Commission (FERC), many pipeline owners face the prospect of having their profits scrutinized to ensure their rates are just and reasonable. Understanding FERC’s approach will help companies ensure they’re not falling outside the zone of reasonableness.

Pipelines: Are Regulators in for the Long Haul?

An economic perspective on long-term contracting for gas pipeline service.

Natural-gas pipelines are among the biggest supporters of long-term contracting for services, as they try to make life easier for themselves. But the time has come to re-examine the pros and cons of such contracts.

Power Measurement

A look at issues that could keep energy executives up at night.

Power Measurement

A look at issues that could keep energy executives up at night.

The most common strategic issue depriving utility executives of sleep is the looming clash of investor expectations for steady growth in earnings compared with what utilities can deliver given slow growth in customers and demand. While many dream of assured regulated rates of return, the reality for most utilities is that the 1.5 percent retail growth experienced between 2002 and 2003 will prove unsatisfactory for earnings.

Moving Gas to Generate Power: An Encore for Hrehor/Sytsma

While responsive to the operational requirements of the particular systems, several new pipeline services enable generators to react more promptly to spiking electric demand.

Putting flesh on the gas-power vision, pipeline efforts to formulate services for generators, and FERC orders governing those efforts now assume a discernible shape. This is a reasonable time to take stock.


Want auctions for gas capacity? Don't think pipeline. Think online.

In July 1998, the Federal Energy Regulatory Commission signaled its intent to try one more time to make greater use of electronic auctions in the pricing and allocation of regulated gas pipeline transmission capacity. The proposed rule, issued in Docket No. RM98-10, marks the third major effort by the commission in this area. Several workshops have already been held. Formal comments are due Jan. 22.

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.

Courts & Commissions

WITH DIRECT ACCESS SCHEDULED TO BEGIN ON Jan. 1, 1998, California regulators are moving quickly to set up their long-considered policies on electric restructuring. The restructuring actions touch nearly every aspect of electric regulation in the state from financing decisions and rate design to the sale of generating assets and monitoring new capital additions.

In addition, restructuring has affected ongoing regulatory activities such as the development of performance-based rate making plans and pricing and rate designs for large incumbent utilities.

Mich. Examines Gas Brokering, Appliance Repair

The Michigan Public Service Commission has authorized Michigan Gas Utilities to increase rates and has ruled that revenues booked by an affiliate that offers administrative, gas brokering and appliance repair services should be included as part of the utility's net income.

The commission said Michigan Gas can increase rates $1.7 million, including an allowance for return on equity of 10.75 percent.

Michigan Gas had excluded from rate calculations revenues found unrelated to utility operations, such as an unregulated affiliate's propane operations.