Security

Mail

ENTERGY REPLIES. In the Feb. 1, 1998 article "Reliability or Profit: Why Entergy Quit the Southwest Power Pool" (p. 30), authors David Dismukes and Fred Denny allege that they have uncovered a "subplot" in Entergy's transfer from the Southwest Power Pool to Southeastern Electric Reliability Council. The fact of the matter is Entergy's rationale for the transfer was clean and above-board. It simply made more sense for Entergy to join SERC for loop flow, reliability and security reasons.

Frontlines

AS YOU CHILL OUT IN YOUR TV CHAIR, WATCHING THE Winter Olympics from Nagano, Japan, think a moment about Kyoto, not far away, and what the climate change treaty might have in store.

On Jan. 8, federal climatologist Tom Karl announced that 1997 was the warmest year on record, with thermometer readings exceeding the mean (1961-90) by 0.42 degrees centigrade (0.75 degrees Fahrenheit). Writing in his World Climate Report, editor Patrick J. Michaels took Karl to task for reporting only half the story.

Pennsylvania Electric Restructuring

The Pennsylvania Public Utility Commission has ended the summer with a series of rulings to guide the state's electric utilities as they devise individual restructuring plans. Overall, the rules seek to temper the effect of competition on certain consumer safeguards and social benefit programs.

Public Purpose Programs. Under new PUC guidelines, electric distribution companies must submit comprehensive, multi-year plans for universal service and energy conservation.

Off Peak

Follow the arrows as California's direct access workshops map out who will have access to electric customer data.

In its latest order implementing direct access for electric customers, the California Public Utilities Commission told Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric to conduct workshops to recommend rules on the release of customer information in a deregulated electric industry.

The PUC offered guidelines.

Joules

Follow the arrows as California's direct access workshops map out who will have access to electric customer data.

In its latest order implementing direct access for electric customers, the California Public Utilities Commission told Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric to conduct workshops to recommend rules on the release of customer information in a deregulated electric industry.

The PUC offered guidelines.

Pennsylvania Electric Restructuring Continues

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.

People

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.

Financial News

S&Ls won damages when the feds reneged on promises. Utilities could do the same.

It's tough to be a utility CFO these days. For decades, electric utilities have served both as target and conscripted agent of government policy. Utilities pay disproportionately high taxes. Utility rate structures further distort market forces with subsidies flowing from business to residential. These policies actually defeat market forces. To large measure, many of these market failures arise from reconciling the hangover from uneconomic policy initiatives.

Pricing Off the Tariff: How to Figure the Maximum Supportable Electric Rate Discount

A simple formula method shows utilities exactly how much to discount prices. Electric utilities have drawn attention recently (and criticism from some quarters) for granting off-the-tariff discounts to customers deemed at risk for migration to lower-priced competitive alternatives. Typically, utilities have offered discounts to high-load customers in exchange for a long-term purchase commitment providing either more certain earnings, higher expected earnings, or both.

Marketing and Competing

Loyalty may depend more on age group than anything else.

Utilities may want to start asking their customers some personal questions.

Such as: "How old are you?"

Why? Because customer behavior may have more to do with age and other demographics than anything. For instance, younger customers compose the highest-switching segment. However, older customers tend to have more loyalty. But so too, these loyal customers are the hardest to woo from another supplier.