PECO

In Norway and in England and Wales, power retailers are learning hard lessons.

The U.S. electric industry has long tried to follow Thomas Edison's dictum "to sell light instead of current" (em to get beyond the meter. But what is beyond the meter at industrial and commercial sites?

In energy-intensive industries one sees processes such as smelters, pulp mills, rolling mills, refineries and chemical plants. In general manufacturing, although some electricity is used for specialized electrotechnologies, most is used for lighting, motive power, computing and robotics.

The Pennsylvania Public Utility Commission has taken new steps in its ongoing effort to restructure the state's electric industry, proposing regulations to govern customer choice of energy suppliers and securitization of stranded costs.

The PUC's new actions on retail choice and stranded costs were designed to comply with state legislation passed last December, known as the Electricity Generation Customer Choice and Competition Act. See, 66 Pa.C.S. secs. 2801 et seq.

In fact, the PUC began last January to implement the new state legislation.

Nine members of the Pennsylvania-New Jersey-Maryland Power Pool filed a revised plan at the Federal Energy Regulatory Commission to establish an independent system operator for the Mid-Atlantic power market.

The utilities have been battling with lone dissenter PECO Energy over the details of the ISO.

The nine utilities, dubbed the "supporting companies," agree on the form that an ISO should take. In November 1996, the FERC had rejected ISO proposals by both parties as having failed to comply with Order 888.

The National Association of Regulatory Utility Commissioners has elected Susan F. Clark, commissioner of the Florida Public Service Commission, as its representative on the North American Electric Reliability Council. Clark has served as Florida's commissioner since 1991. Commissioner of the North Carolina Utilities Commission, Allyson K. Duncan, also was elected to serve as a NARUC representative. Duncan will represent NARUC on the advisory council to the board of directors of EPRI.

Tony A. Prophet, former new business development v.p.

The PJM Interconnection is what they call a "tight" power pool. As the Federal Energy Regulatory Commission has explained, tight power pools "extensively coordinate" their planning and operations, with central dispatch of generating plants. This coordination builds reliability--one of the long-term benefits, says the FERC, of a tight power pool.

Coordination also builds market power, however. And, as we all know from FERC Order 888, market power in transmission stands as "the single greatest impediment" to electricity competition.

At a proceeding marred by hecklers and the arrest of five protesters, the Pennsylvania Public Utility Commission finalized a preliminary decision awarding PECO Energy Co. $1.1 billion of its requested $3.8 billion in stranded cost recovery (Docket R-00973877).

On May 8, by a 4-1 vote, the PUC issued a nonbinding order to allow PECO to refinance the $1.1 billion in stranded costs at lower interest rates through issuance of asset securitization bonds to be paid over 10 years.

When I took this job three years ago, I posed the question, "Price or Service?" in the title of my first frontlines column.I suggested that natural gas utilities appeared willing to sell on price, but not electrics. The CEOs all claim that electricity has become a commodity. But I'll bet the franchise that electric utilities haven't yet figured out whether they are selling electrons (a commodity) or comfort and peace of find (a niche service).

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.

PECO Energy Co. has asked the Pennsylvania Public Utilities Commission to approve its securitization request and reject a recommendation by an administrative law judge that the PUC not allow PECO to recover stranded costs from ratepayers.

On Jan. 22, PECO asked that it be allowed under the state's new electric competition act to refinance $3.6 billion of its electric generation assets through securitization. But on April 14, Judge Louis Cocheres recommended against the proposal. (See Pa PUC Docket No.

Do mergers and "critical mass" really make a difference? The answer, it seems, is yes.

To become more competitive, U.S. electric utilities have embarked on a quest in recent years to improve operational efficiency and factor productivity. The question is: Are utilities making progress? And, which companies have gained a competitive edge? Which have not?

Industry analysts have long argued that given the structure of the markets they serve and their cost-based, rate-setting procedures, electric utilities tend toward monopolistic behavior.