The Gas Storage Market: What Does it Tell Us?

The authors asked pipelines

and LDCs how they used storage.

Leasing activity proved a surprise.

Since deregulation, the natural gas industry has seen tremendous changes in every sector. Competitive pressures have reorganized business strategies so much that only those firms that adapt will survive. One area that stands ripe for change is the natural gas storage market.

Why build gas storage fields?

Retail Aggregation: A Guaranteed Right for Small Customers?

With a CTC likely to cover stranded costs,

aggregators must somehow find power cheap

enough to offer real savings.

Retail aggregation: Wherever you stand, it appears 1998 could be the year of reckoning.

By then (em say those watching the future of aggregation in the "leader" states of California, New York, Massachusetts, and New Hampshire (em rulemakings will have sorted out the issues of stranded costs, distribution, and reliability.

Energy Service Companies: No More Mr. Niche Guy

The larger companies are winning more business. But how will

they fit into a restructured industry?

Put 45 energy service companies (ESCos) into a $1-billion market, and they easily average over $20 million each. That's almost four dozen companies exploiting a niche an eighth the size of the microprocessor industry.

So it's easy to understand why new ESCos, half with utility roots, enter the fray weekly.

Off Peak

As this snapshot look at the seven utility mergers announced since January 1995 demonstrates, traditional patterns are no longer being followed. A number of the announced transactions did not fit squarely into either the merger-of-equals model (little or no premium, fairly even equity and board split, CEO succession plan) or the acquisition model (high premium, disparate equity and board split, no CEO succession plan).

Arkansas Oks Weather Normalization for LDC

The Arkansas Public Service Commission (PSC) has authorized Arkla, a division of Noram Energy Corp. and a natural gas local distribution company (LDC), to apply a weather normalization adjustment to billings from November through April. Finding that the new clause did not constitute a "general rate increase," the PSC rejected procedural objections that it failed to meet certain notice requirements.

LDC Aggregates Transportation Loads

The Florida Public Service Commission (PSC) has approved a proposal by Peoples Gas System, Inc. to make gas transportation service available to customers that use more than 500,000 therms of natural gas, in the aggregate, at multiple delivery points within its service territory. To qualify, the multiple facilities must be directly owned and operated in the name of a single customer of record. The rates will be the same as those charged under the otherwise applicable sales tariff, less the purchased-gas adjustment charge.

LDC Acts to Retain Large Customers

The Maine Public Utilities Commission (PUC) has authorized Northern Utilities Co., a natural gas local distribution company (LDC), to offer a special rate to extra-large firm sales customers. The new offering is designed to enable large customers with flat loads to obtain gas service at a rate that better reflects the lower nongas cost of service for such customers. Unusually large customers

wishing to take service under the new rate must demonstrate that their load is largely flat and, thus, maximizes the nongas costs of serving their needs.

Wisconsin Uses Bidding Threat as DSM Incentive

The Wisconsin Public Service Commission (PSC) has decided to add a "performance mechanism" to its regulations governing demand-side management (DSM) efforts. The PSC found that some utilities were no longer meeting the DSM goals set in their rate cases.

Industry Reorg. Prompts Same at Corporate Level

The California Public Utilities Commission (CPUC) has approved a corporate reorganization plan making San Diego Gas and Electric Co. (SDG&E) a wholly-owned subsidiary of a holding company structure formed by the utility. The utility said the reorganization would provide the separation of lines of business necessary to insulate regulated utility cash flows from the volatility and risk of competitive markets.