Privatization Knocks

The timely article on Central America and the Caribbean by Lee M. Goodwin (Nov. 15, 1994) omitted to mention the privatization potential of the region's utility systems. For example, Grenada recently privatized 50 percent of its utility, GRENLEC, and Trinidad and Tobago has privatized electric generation. These alternatives to "greenfields" project development deserve attention from U.S. developers as well. In any case, based on my experience, I would certainly echo Mr.

H.J. "Jim" Mellen, Jr. was named CEO of MDU Resources Group Inc. He will retain his current position as president. Mellen replaced John A. Schuchart, who will continue as chairman of the board.

Robert Anderson, Montana Public Service Commission member, was elected 104th president of the National Association of Regulatory Utility Commissioners. Edward H. Salmon, member of the New Jersey Board of Public Utilities, was elected first v.p.

By the end of 1996, the 400,000 urban customers of Kansas City Power & Light Co. (KCPL) will enter a new age of technology.

A real-time wireless network will bounce readings from small transmitters installed in the existing meters of every home and business in the greater Kansas City metropolitan area back to computers at the utility's customer services office.

No matter how you cut it, the Customer Information System (CIS) represents a utility's largest computer asset. It eats up the most disk space. It contains the most programs and lines of code. It handles the largest volume of business, whether measured in transactions or dollars.

Billing lies at the core of the CIS. It's the most complex area. But once bills go out to customers, the CIS must manage accounts receivable and the collection process, not to mention financial control and reporting.

One of the great attractions of demand-side management (DSM) lies in its ability to accommodate one-stop shopping. In contrast to the traditional supply-side approach, DSM allows energy utilities to minimize price hikes and maintain environmental quality even while meeting increasing needs.

Nevertheless, some of the initial excitement has waned. For example, The Wall Street Journal reviewed 11 programs in late 1993 and found that 8 realized less than half their projected savings.

We begin the new year with a recap of the major rulings issued last year by state public utility commissions (PUCs).

Electricity took center stage as state commissioners began in earnest to examine rising competition in the power generation market. The seemingly endless number of privately sponsored seminars, conferences, and reports on the issue might suggest that regulators are following rather than leading on policy.

Retail wheeling has been repeatedly condemned by opponents who claim that it would cause rate discrimination between customer classes. They allege that it would unfairly reduce rates for large customers, while raising them for small ones. But discriminatory rate structures already result from the selective discounts that utilities grant their large customers.

The debate over the merits of pool-based markets as opposed to reliance on bilateral transactions and the invisible hand of competition began without much care taken to define the details of the bilateral alternative. On closer examination, however, we find the two approaches have much in common, being more like different pews than different churches. A further debate that emphasizes only the few differences would not inform so much as distract from solving the common problems.

Vikram S. Budhraja

Vice President of Planning and Technology

Southern California Edison Co.

The transition to a competitive generation marketplace is underway. Customers want choices, flexibility, and competitive prices. Producers want open nondiscriminatory access to markets. Regulators want a smooth transition to the new system based on competitive efficiency, not cost-avoidance or cost-shifting among customer groups. And policymakers want a system that protects consumers without sacrificing environmental and energy policy objectives.

2 percent of California's gross state product. Competitively priced electricity is vital to California's $800-billion-a-year economy, one would think.