Strategy

"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.

Midwest panel fears service decline, sees small companies as speed bumps on road to competition.

"Mergers and restructuring" could have described the panel, but "Four Weddings and a Funeral" gave the session the cinematic spin it demanded.

Craig A.

Today's critics decry stranded costs, yet fail to cover their tracks.

Many of today's most vociferous critics of stranded cost recovery were once among the most ardent supporters of the nuclear plants they now disavow.

Back in the '70s, when electric utilities and regulators laid out their long-term plans, nuclear power played a leading role, and American industry largely concurred. Now, however, 20 years later, the business sector sings a new tune. "I told you so," the refrain goes.

The National Coal Council has released the findings of a major new study on coal prepared at the request of former DOE Secretary Hazel O'Leary, which found that while the generation of electricity from coal has increased, emission of pollutants from coal has decreased.

A similar report was released in April, conducted by Mills-McCarthy & Associates, and sponsored by the Western Fuels Association, Inc., the National Mining Association, and the Center for Energy and Economic Development.

The Minnesota Legislature is poised to pass a bill that would allow the state to take full advantage of any relief granted by federal courts in pending cases over the U.S. Department of Energy's nuclear waste disposal obligations.

State Senator Steve Murphy and state Representative Steve Timble introduced the legislation, which has support in both Houses. The legislation was introduced to ensure that state ratepayers would see immediate relief if ordered by federal courts in pending cases in the next several months.

The Heritage Foundation has released its second report in a series on electric deregulation, aimed at capturing the attention of lawmakers on Capitol Hill now holding hearings on proposed legislation to restructure the electric industry.

The new report, Electricity Deregulation: Separating Fact From Fiction in the Debate Over Stranded Cost Recovery, by Adam D. Thierer, concludes that lavish stranded cost recovery is not justified, and that the "sky will not fall" if stranded cost recovery is limited or denied.

Enova/PE merger finds

California utilities learning

how to "micro-unbundle."

here's a meter war ticking away out West, pitting natural gas against electricity.

Enova Corp. is set to acquire Southern California Gas Co. through a merger with the gas utility's parent company, Pacific Enterprises. This strategy raises a tantalizing question: Can the new, merged company sell electricity "through" SoCalGas meters, using customer contacts on the gas side to grab market share in electricity from Southern California Edison, whose territory overlaps that of SoCalGas?

Valuation, optimization and settlement strategies

oth gas and electric utilities face a variety of environmental issues arising from more than 1,500 former manufactured gas plant (MGP) sites, which supplied a major source of energy in the United States from the early 1800s to the mid-1900s. Using the standard operating procedures of the day, MGPs created and often disposed of byproducts such as coal and oil tars, tar/water emulsions, sludges, spent oxides (including cyanides), lampblack, ash and clinker.

s The technology is digital.

s The medium is cyberspace. The product is a strategic system for billing, collection and customer services (BCCS) that integrates knowledge and choice through an automated customer interface.

The impending obliteration of the business boundaries between the gas, electric and other energy industries will launch a series of convergent waves of change. Executives, regulators, legislators, investors and, naturally, consumers must ride this wave over the next 10 to 15 years.

A group of 40 state agencies has joined with 33 utilities and the Nuclear Waste Strategy Coalition (NWSC) to file a lawsuit in federal district court after the Department of Energy (DOE) reported that it would not comply with a federal court mandate to accept high-level radioactive waste for permanent storage as of January 31, 1998, and begin removing such waste from temporary storage at some 73 power plants in 34 states.

The D.C. Circuit had ruled against the DOE last summer. (See, Indiana-Michigan Power Co. v.