Transmission

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.

RELENTLESS. That's the word consultant Benjamin Schlesinger uses to describe the growing share of North American markets claimed by natural gas produced in the U.S. Rocky Mountain region, the San Juan basin and western Canada.

"Western gas has climbed steadily, from 21 percent of North American gas production in 1975, to 33 percent in 1995," says Schlesinger, president of Benjamin Schlesinger & Associates Inc., Bethesda, Md. "It looks like that figure will reach 35 percent in the next few years.

THE board of trustees for Con Edison named James P. O'Brien general auditor. O'Brien joined Con Edison in 1972 after serving in the U.S. Navy. He will replace Lawrence F. Travaglia who is retiring.

Consolidated Natural Gas Co. named Elena C. Mola vice president, Latin America/Europe, of its subsidiary CNG International.

Siemens Power Transmission and Distribution named David Johnson vice president of its distribution automation division.

The Energen board of directors announced two promotions.

Federal Agencies

Nuclear Plant Fines. The Nuclear Regulatory Commis-

sion has proposed fines totaling $2.1 million against Northeast Nuclear Energy Co. for many violations at the company's Millstone nuclear plant in Waterford, Conn. The fine marks the largest civil penalty ever proposed by the NRC. Northeast Utilities said it will pay the fine, which it called "a necessary and important step toward bringing to closure a very disappointing and difficult chapter in the company's history." The utility said it will not pass the cost onto ratepayers.

Electric Futures.

ON OCT. 31, 1997, ENTERGY CORP. AND 16 OTHER MEMBERS

announced their intention to withdraw from the Southwest Power Pool regional reliability council and join the neighboring Southeastern Electric Reliability Council. The announcement shocked the SPP and its members, plus other industry observers and stakeholders.

While significant in number, the withdrawals do not necessarily signal widespread displeasure with SPP's initiatives and performance.

POWER DISTURBANCES COST U.S. ELECTRIC CUSTOMERS about $26 billion each year: nearly three times the anticipated annual saving from deregulation.

Competition and restructuring will only turn up the pressure, as the grid carries more low-cost power over longer distances to a wider variety of customers.

Already we are seeing a rapid rise in wholesale power transactions. Some utilities now complete as many such transactions in one day as they previously made in one week. Overall, the value of wholesale transactions has increased fourfold over the last decade.

Go figure. Plans to shut down nuclear generation in Ontario should not affect electricity supplies this winter within the United States, despite early rumors of chaos and rising natural gas prices. However, an unexpected slowdown in coal delivery by some U.S. railroads has "seriously reduced" on-site stockpiles of coal at some generating plants in three regional reliability councils - ERCOT, SERC and SPP - particularly those dependent on coal from the Powder River Basin in Wyoming.

BY THE START OF 1998, FOUR INDEPENDENT SYSTEM operators already were in operation and conditionally approved: ISO-NE, PJM and California by the FERC and Texas by the state PUC. Three more were either pending before the Federal Energy Regulatory Commission or expected to be filed in the coming months (New York, Midwest and IndeGO in the Northwest). Three additional efforts to develop ISO proposals were under way (DesertSTAR, MAPP and SPP). The Southeast is now the only large region of the contiguous United States without an ISO concept.

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.

USE OF U.S. ECONOMY UPHELD FOR EQUITY CALCULATIONS

The Federal Energy Regulatory Commission, in seven rate cases involving interstate natural gas pipelines, has upheld a new policy on the appropriate long-term growth rate to be used in computing their return on equity. Five of the pipelines contested FERC's new policy, as announced in Opinion 396-b.

The Commission defended the rate-setting method, but decided to allow the pipelines a chance to prove why the rules should not apply to them. The contesting pipelines are: Trailblazer Pipeline Co. (Docket No.