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Fortnightly Magazine - March 1 1998

News Digest

State Legislatures

UTILITY HOUSE CALLS. Michigan Gov. John Engler (R) signed into law a bill making it a felony to impersonate a utility employee to enter private property for criminal purposes. The new law calls for those convicted to be imprisoned for not more than two years and to pay a maximum fine of $1,000, or both.

ELECTRIC RESTRUCTURING. Illinois Gov. Jim Edgar (R) signed into law an electric restructuring bill for the state. Edgar noted that concerns over the bill were addressed by the state's two largest utilities, Commonwealth Edison and Illinois Power Co.

Byline: 
Lori A. Burkhart, Phillip S. Cross and Beth Lewis
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Perspective

THE PEOPLE HAVE spoken. They want choice in power supply in California and in other states. But people are also "load," at least in utility parlance. And some load in some areas can prove awfully difficult to serve. They're called "load pockets."

The Challenge

A load pocket is formed when a deficiency in transmission capacity to a market area cannot be priced away sufficiently to clear the market during peak-load periods. Consequently, the market area must rely on "must-run," local generation units during part of or all of the year.

Byline: 
Michael Schmidt
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Texas Judge Rips Telecom Act Finds Prejudice Against Baby Bells

ON THE LAST DAY OF 1997, A U.S. DISTRICT COURT IN Texas struck down sections of the Telecommunications Act of 1996 that prevent former Bell System operating companies (BOCs) from entering certain lines of business, including interstate (and interLATA) long-distance. Some see the case as a clear victory for the BOCs. Others say it disrupts the delicate compromise forged by Congress among many diverse interests. In truth, the court's decision prompts a single question: Can Congress single out the BOCs for special treatment?

Byline: 
Phillip S. Cross
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Speaking of Reliability

THE North American Electric Reliability Council is in the midst of public workshops to discuss how best to implement the recommendations made in its Electric Reliability Panel's final report. In January, the NERC Board of Trustees approved, Reliable Power: Renewing the North American Electric Reliability Oversight System, which recommends transforming the current council into an independently governed and funded North American Electric Reliability Organization.

Byline: 
Lori M. Rodgers
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Off Peak

ARE THINGS REALLY THAT DIFFERENT ON THE other side of the world?

Two surveys say no (em at least in respect to electric restructuring issues. Andersen Consulting's The Impact of the Internet on Energy Retailing polled industry leaders in Australia; Washington International Energy Group's 1998 Electric Industry Outlook talked to their American counterparts.

Similar questions posed in both surveys show that industry leaders on opposite sides of the globe share many concerns as their countries move toward electric competition.

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Power Pools & ISOs: Monitoring Market Power in a Restructured Industry

THE CALIFORNIA DEBATE OVER ELECTRIC RESTRUCTURING IS now nearly four years old. And though it is nearing its final stages (the opening is now set for March 31), some of the most important questions as to how this will work in practice are just emerging.

The original bargain had called for the state's three large investor-owned utilities to vest basic control of their transmission networks in the new independent system operator in exchange for maintaining combined ownership of generation and transmission assets (and for a good level of assured stranded cost recovery).

Byline: 
Reinier Lock
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Evaluating Power Plant Property Taxes Under Deregulation

THREE FACTORS (em RESTRUCTURING, TECHNOLOGY AND environmental controls (em now create both reason and opportunity for electric utilities to lower their property taxes, which often make up a substantial cost of doing business.

Property tax valuation is fairly straightforward. Most states compute property taxes on fair market value, or what a hypothetical buyer and seller would agree the property is worth, with both parties having knowledge of the relevant facts and neither compelled to buy or sell.

Byline: 
Steven P. Schneider
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Enron's Battle with PECO: An Inside View from Outside the Industry

FOR ALL THE ATTENTION FOCUSED ON NEW LAWS AND regulations designed to create competition in electric power markets, too few people seem to grasp how a market can work. That will change, however, now that Pennsylvania is the first large state to embrace market pricing.

Pennsylvania's lawmakers and three of its five utility commissioners have developed a market to deliver the benefits of competition to consumers.

Byline: 
Steve Isser and Steven A. Mitnick
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A History Lesson How the PUC Viewed the Case

ON APRIL 1, 1997, nearly four months after Pennsylvania Gov. Tom Ridge (R) had signed the state's Electricity Generation Customer Choice and Competition Act, PECO Energy Co. filed its restructuring plan with the state Public Utility Commission. To bolster the plan, PECO gathered a group of stakeholders to review it and craft a settlement. That agreement, somewhat different from the April restructuring plan, was filed with the PUC on Aug. 25. It became known as the Partial Settlement.

On Oct.

Byline: 
Elizabeth Striano
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A Clean Divorce? Splitting the NY Power Pool ISO Toes the Line, but new Reliability Council Raises Brows

DOES IT MATTER THAT NEW YORK'S PROPOSED RELIAbility Council won't be truly independent, even though its distinctly separate independent system operator now plans to require pristine board membership?

Both organizations begin operating as early as July. On paper, any conflict between market needs (i.e. generation) and reliability issues (largely transmission and distribution) will head to the state public service commission or FERC. But reality may force that hand in the effort to restructure New York's wholesale market.

On Dec.

Byline: 
Joseph F. Schuler Jr.
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