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Fortnightly Magazine - May 15 1998

Benchmarks

LAST YEAR, RESOURCE DATA INTERNATIONAL PREDICTED THAT merchant plant activity was poised for explosive growth as deregulation created opportunities for a new breed of highly efficient generators. (See "Merchant Plant Activity Set to Explode," April 15, 1997, p. 14.) This prediction has proved true, with nearly 30,000 megawatts of publicly announced merchant plants under development.

More than 50 percent of this development is concentrated in New England, a particularly attractive market for merchant plant development.

Byline: 
Christopher Seiple and Christopher Neil
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News Digest

TELCO UNIVERSAL SERVICE FUND. Reversing an appeals court, the Kansas Supreme Court upheld a decision by the Kansas Corporation Commission that had required wireless telecommunications carriers to contribute to the state's universal service fund. It also affirmed a KCC ruling setting the initial amount of the fund in a roundabout way based on equalizing inter- and intrastate long-distance rates.

The KCC order (issued Dec. 27, 1996) had slashed intrastate toll rates by $111 million over three years. It then cut access charges by an equal amount to offset the loss to toll carriers.

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

IF AN INDEPENDENT SYSTEM OPERATOR OVERSEES THE TRANS-

mission grid, how much independence is too much? Should ISOs cede control over dispatch to scheduling coordinators, or market functions to a power exchange? Addressing some of these questions, a new report released in April by The Progress & Freedom Foundation criticizes a restructured electric industry built on ISOs with restricted authority.

Byline: 
Lori A. Burkhart
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Perspective

Editor's Note: It was an awkward spot. Power marketers wanted the Federal Energy Regulatory Commission to block the "tagging" rules imposed by the North American Reliability Council. Could the FERC do that? Having stalled for more than six months, with no sign of action, the Commission surprised the federal energy bar when, on April 7, with no mention on the agenda (there could be no agenda, since there was no meeting), it surreptitiously released its opinion. Also caught unawares, the Fortnightly asked Jeffrey Watkiss, an attorney in the case, to explain what it all means.

Byline: 
Jeffrey D. Watkiss
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Off Peak

WHEN EXECUTIVES IN CHARGE OF ENERGY purchases for national, multi-site companies say, "Simplify my life," they mean it.

These executives are doing business nationwide with an average of 60 electricity suppliers. This figure will drop more than 80 percent to 11 suppliers once electric competition gets underway, according to RKS Research & Consulting's 1997 National Account Survey.

RKS Vice President Carmine Grastataro directed the study and oversaw focus groups of vice presidents of construction, energy management, retailer, health care and property management companies.

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PSC - Restructuring Orders

PLANS OK'D for electric IOUs under New York's Competitive Opportunities docket.

CENTRAL HUDSON GAS & ELECTRIC CORP. RETAIL CHOICE: Offered to 8 percent of total load in 1998; additional 8 percent each year; choice for all by July 1, 2001. SAVINGS: $10.5 million to fund 5-percent rate cut for large industrials; all other rates frozen (since 1993) through June 30, 2001. Earmarks $24.5 million for incentives for residential, commercial and small industrial classes. Generation backout rate is highest among IOU restructuring plans.

Byline: 
Bruce W. Radford
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The Cost of Reducing SO2 (It?s Higher Than You Think)

LAST YEAR, IN JUSTIFYING THE PROPOSED NEW NATIONAL AMBIENT Air Quality Standards (NAAQS) for particulate matter and ozone, Environmental Protection Agency Administrator Carol Browner testified that: "During the 1990 debates on the Clean Air Act's acid rain program, industry initially projected the costs of an emission allowance¼ to be approximately $1,500¼ Today those allowances are selling for less than $100." %n1%n

Later in 1997, at the White House briefing announcing President Clinton's Global Climate Change Plan, Katie McGinty, chairwoman of the Council on Environmental Quality, sa

Byline: 
Anne E. Smith, Jeremy Platt, and A. Denny Ellerman
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Ready for CO2 Allowances? U.S. Passes on Emissions Cap, Kyoto or No

FOILING EXPECTATIONS OF BOTH SUPPORTERS AND detractors, the Clinton Administration's proposed electric restructuring legislation offered no new policy on carbon-dioxide emissions, such as a cap-and-trade program similar to that already in place for sulfur dioxide.

But don't breath a sigh of relief. The debate has only begun.

Many observers see the Administration's tactics on CO2 as an obvious attempt to sidestep a highly sensitive political issue. They appear to agree that at some point the Administration must confront CO2 emissions.

Byline: 
Elizabeth Striano
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The Electric Competition Debate in...Texas

PAT WOOD III LIKENS HIS JOB TO CLEARING THE UNDER-brush "so the general can march through."

The "general" is the Texas Legislature; Wood is chairman of the state Public Utility Commission; the battle is electric utility restructuring.

To an outsider, it looks like Wood's commission is way out in front of the state's elected officials. Legislators are adjourned this year but the seven-member Senate Interim Committee on Electric Utility Restructuring is doing its best to sort through hearings on market power, transmission and distribution, reliability and other issues.

Byline: 
Joseph F. Schuler Jr.
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