BY THE END OF MARCH, CALIFORNIA, RHODE ISLAND, and Massachusetts planned to offer retail choice to customers. However, early signs suggest electric competition may fall short of expectations due to stranded cost recovery mechanisms and the desire of customers to protect themselves from risks inherent in a competitive market.
When the California market was about open, less than 5 percent of customers had elected to switch suppliers.
MICHIGAN CHOICE APPEAL. Michigan Attorney General Frank Kelley filed an appeal in the Michigan Court of Appeals of the Michigan PSC's Jan. 14 rehearing order (News Digest, March 15, 1998, p. 18) adopting a phase-in schedule for electric restructuring and retail choice for Consumers Energy and Detroit Edison. Kelley alleged that the order fails to create a competitive generation market or foster lower rates. He called it an "outrage," that gave the utilities everything they wanted. Case Nos. u-11290 et al., Feb. 13, 1998 (Mich.P.S.C.).
NEW HAMPSHIRE RESTRUCTURING. The U.S.
AMERICANS ARE fascinated with lists. There are lists of just about anything you can name, from the Fortune 500 to baseball batting averages. There's even a book of lists. We especially like to rank "top tens," like the 10 best cities to live in or the 10 worst school districts in America. Television has popularized these lists.
WHETHER DOING BUSINESS IN SANTIAGO OR Krakow, Budapest or Bang Kraui, American energy service companies agree: It's tough to find a lender to finance international projects.
ESCO executives working around the globe met to commiserate at the International Roundtable on Energy Efficiency Financing Feb. 26-27 at the Ritz-Carlton Hotel in Arlington, Va. Sponsors of the Roundtable included the National Association of Energy Service Companies and the Export-Import Bank of the United States.
ARE UTILITIES STOCKS STILL MAKING WIDOWS AND orphans happy?
According to PaineWebber's report, Power Book, utility stocks "are likely to continue to lag the market." Of the 66 electric utilities surveyed, only 9 earned a "buy," or "1," recommendation, and six scored "unattractive," or a "4" rating (see table). The rest fell somewhere between, their stocks labeled either "attractive," or "neutral."
While a merger can bolster a company's potential, it isn't a sure bet. Cinergy Corp.
April 01, 1998
WHICH NUCLEAR PLANTS WILL SURVIVE competition? To answer that question, senior managers at electric utilities must know a nuclear plant's true economic potential. Without an accurate understanding of operating economics, a utility might lose a good plant or waste resources on poorer plants that should be closed.
Of course, a shutdown may be appropriate at some plants (em perhaps a few situated in the most competitive regions, or others plagued by poor inherent physical characteristics. However, most U.S.
PURRED BY FLAT POWER DEMAND AT HOME IN RESIDENTIAL and industrial markets, U.S. utilities are taking huge risks in Latin America. Why? They are enticed by the promise of high-yield returns on generation, distribution and transmission deals.
Yet only some of the companies getting in on the ground floor of privatization or winning concessions in the Latin American energy market stand to make huge profits. Others, too slow to beat competitors, or not savvy enough to skirt political and regulatory land mines, could lose their shirts.
As the U.S. electric power industry unbundles, the industry and its regulators grapple with two big questions concerning the degree to which distribution services should be unbundled. First, what groups of distribution activities can separate suppliers provide? Second, which of these groups of activities should be open to competition?
Looking at the unbundling experiences of Argentina, Australia, Canada, Chile, Norway and the United Kingdom sheds light on these questions. The distribution unbundling of the U.S. gas and telecommunications industries provides additional insights.
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 struggle for control of the northern grid in Chile has precedence in the central region, and now, further south, where El Paso International Co. and partners are building the $380 million Gasoducto del Pacifico pipeline.
Some 325 miles of pipe will be laid across the Andes from Argentina. The project, 300 miles south of Santiago, is set to be in service by late 1999.
Gasoducto del Pacifico includes a $44-million transportation and marketing company (em Servicios de Gas Natural (em that will serve industrial customers in the region.