As we move toward open energy markets, new players will be competing to offer consumers many of the services utilities offer today. It will no longer be enough to just meet our obligation to serve. We will also need to provide the products and services that customers value, at a level superior to that of the competition, while enhancing value to shareholders.
To retain customers, utilities need to understand the nature of the market. What customer values shape it?
The Virginia State Corporation Commission (SCC) has approved a plan by two natural gas local distribution companies (LDCs), Washington Gas Light Co. and Delmarva Power and Light Co., to join with other regional LDCs to form a cooperative to provide for the coordination and use of common capacity, storage, transportation, and supply assets. According to the LDCs, the East Coast Natural Gas Cooperative was a necessary response to recent changes in the gas industry, which shifted responsibility for arranging gas supplies from interstate pipelines to LDCs.
The Federal Energy Regulatory Commission (FERC) has issued two final rules that seek to reduce the filing burden on the natural gas industry. One simplifies the Uniform System of Accounts and the FERC's reporting requirements (Docket No. RM95-4-000). The other simplifies the filing requirements for making rate and tariff changes under Part 154 of the regulations (Docket No. RM95-3-000).
The rules recognize that most interstate pipelines now serve as transporters rather than as merchants.
Did you hear the one about the middle-aged utility executive who became depressed about plans to restructure his company? It seems he couldn't cope with how fast things were changing. So he threw himself in front of a glacier.
That story comes from a meeting I attended back in October, styled Executive Visioning Workshop, sponsored by Arthur D. Little, Inc., which attracted some 21 energy industry executives.
Regulatory Commission (FERC) to approve a set of market-based rates for short-term firm transportation, interruptible transportation, temporary capacity release, and storage services (Docket No. RP95-408).
On a cold day, natural gas from storage reservoirs may supply as much to markets as gas from producing wells. The ability to store gas underground not only ensures reliable delivery during periods of heavy demand, but also allows more level production and pipeline flows throughout the year. Thus, some believe that the cost of storage should be spread over all gas delivered during a year, not just gas delivered from storage sites to end-use customers during the winter.
Does it make good business sense to offer a service that brings in considerable revenue but virtually no profit?
In the past, special circumstances explained why local distribution companies (LDCs) sold natural gas to customers without earning a profit. But circumstances have changed.
Does it make good business sense to offer a service that brings in considerable revenue but virtually no profit?
In the past, special circumstances explained why local distribution companies (LDCs) sold natural gas to customers without earning a profit. But circumstances have changed.
In the wake of Federal Energy Regulatory Commission (FERC) Order 636, gas marketing entrepreneurs gained unprecedented opportunities to compete for noncore, industrial loads. That market has matured.
Erroll B. Davis, Jr.
President & CEO
Wisconsin Power & Light Co.
WP&L advocates that the following steps be taken to create a level playing field for merchants entering the retail market:
s Distribution rates should be fully unbundled from retail sales tariff rates.