1. Subordination of capital. Neither interest nor dividends may be paid on invested capital. Cooperatives provide for a return of capital-not a return on capital. Furthermore, neither the amount of patronage nor the amount of investment of a patron can determine such patron's degree of ownership or control of the organization, i.e., there must be patronage-based ownership.

"What the electricity market needs is a forward market with an ability to vary price and volume on an hour-by-hour basis."

Off Peak

October 1, 2001

Pennies From Heaven

 

Make that 2.3 cents-the miserly refund that California says it might owe for power that it sold to the Pacific Northwest.

Every time it rains ... it still leaves those hydro reservoirs just a little bit short.

 

News Analysis

 

IPPs and other stakeholders long have called for standards, but this time, the FERC just might oblige.

 

"Certain transmission owners ... have impeded the interconnection process and, thereby, new generation construction."

"Many transmission providers also refuse to offer network transmission service to merchant generators ... ."

Some want a tighter grip on generators, but FERC should steer clear.

Frontlines

Ripple Effects

 

The Risk that Wasn't Hedged: So What's Your Gamma Position?

 

Power markets often show coincident peaks in price and volume.
That can make profit unusually volatile.

Force equals mass times acceleration (F=ma). Any student of physics should know this equation. In other words, force doesn't just increase with added mass; rather, it accelerates in its strength.

Gas Price Prudence: From Hedge-and-Hope to Best Practice

Utilities and regulators should follow the same ideas that govern risk management at the largest of commodity trading houses.

The July 5, 2001 issue of offered an update on what utilities and regulators are doing in the area of commodity price hedging for natural gas.

The headline read, "Dominion East Ohio Sales Customers Will Pay 29% Less in Gas Costs under PUCO-Led Encouragement of Hedging Plan...."

Natural Gas Hedging: A Primer for Utilities and Regulators

 

What commissions need to learn.
What LDCs should already know.

The facts are now in. If utilities had hedged their natural gas purchases during the 1990s, they could have earned windfalls for those they serve, given the wild price gyrations of the past decade (). Yet few if any households or businesses saw any windfall, because few utilities were engaged in futures and other derivatives markets.