The electric industry hasn't seen so much upheaval since Thomas Edison threw the switch at the Pearl Street Station. Full retail access to competitive markets in generation and supply will challenge traditional ways of doing business. But no change will prove more dramatic for electric utilities than setting a competitive price (em that most fundamental of business decisions.

In anticipation of competition, utilities have been experimenting to discern what forms of the "product" (em electric power (em customers might want, and at what prices. One such experiment is real-time pricing.

Myth 1. RTP increases the utility's costs and revenue requirements. %n1%n

Reality 1. A well-conceived RTP program reduces the utility's costs and revenue requirements.

RTP programs can reduce peak demands for power, increase off-peak demands, and reduce the need for additional peak-load capacity. This increase in efficiency can lead both to higher company profits and greater customer savings. As the electric industry becomes more competitive, these savings will flow to those customers most responsible for lowering the utility's costs.

RTP assumes that price spikes will deter load. But how will customers behave if they've hedged against that risk?

Tomorrow's electricity industry promises a wealth of pricing options as wholesale generation becomes more like a commodity. Spot pricing marks one example. And with spot markets will come a greater need for price derivatives (em hedge contracts that will permit customers to trade or shed risk to achieve a higher degree of price certainty.

I was amused and concerned by the allegations of marketing warfare that Mr. Krebs felt compelled to address in his December 1996 article.

One of these days you may see a former chairman of the American Gas Association become the new chair of the Edison Electric Institute. Or maybe the other way around.

I broached this subject the other day when I found myself downtown at EEI headquarters on Pennsylvania Avenue, talking with some association reps.

Dennis L. Haider succeeded the retiring R.J. White as president of Prairielands Energy Marketing, Inc. Haider moved over from v.p.-operations for the Williston Basin Interstate Pipeline Co., another unit of MDU Resources Group Inc. Prairielands became a subsidiary of Williston Basin when Haider took over as president.

In a related development, Ronald G. Skarphol, a special projects manager of Montana-Dakota Utilities Co., takes White's place as v.p.-marketing and business development. Montana-Dakota is another MDU division.

If truth is the first casualty of war, as we learned from author Mark Krebs ("It's a War Out There: A Gas Man Questions Electric 'Efficiency,'" December 1996, p. 24), then certainly the truth has been mutilated beyond recognition.

His article, which suggests that electric utilities have used conservation and demand-side programs improperly (to build electric load at the expense of natural gas!) is full of inaccuracies, misleading charts and other errors.

Peabody COALSALES Co. agreed to provide Minnesota Power as much as 2.5 million tons of low-sulphur coal each year. Coal will be supplied by Peabody affiliate Big Sky Coal Co. Big Sky's contract with the power company ends in May; the new agreement runs through 1999. Terms of the deal weren't released.

The Georgia Public Service Commission begins a series of workshops on electric industry restructuring next month. The workshops will examine national efforts, consumer ramifications and environmental and energy efficiency issues. Stranded costs also will be targeted.

Central Illinois Light Co. unveiled its electric choice bill, which, if enacted, would allow residential customers to choose their electric suppliers beginning Jan. 1, 1998. The proposed legislation appears to conflict with another competition bill introduced Nov. 19, 1996 by the Illinois Coalition for Responsible Electricity Choice, which advocates a phase in of choice from 1997 through 2005. CILCO is the only major electric utility in Illinois that is not behind the Nov. 19 bill.

The CILCO bill, "Consumer Freedom To Choose Electricity Law," was introduced on Jan.

Testifying before the New Hampshire Public

Utilities Commission, the CFO of Northeast Utilities, John H. Forsgren, warned that a proposed electric deregulation plan could push subsidiaries Public Service Co. of New Hampshire, and North Atlantic Energy Corp. into bankruptcy.

Consulting company LaCapra Associates gave its deregulation report and recommendations on Jan. 3 to the PUC. The Jan. 20 hearing was aimed at examining stranded costs, and what portion of its $800 million stranded costs PSNH would be allowed to recover.