Make gas pipeline rights more fungible, but draw the line at contingent bidding.
Last July the Federal Energy Regulatory Commission proposed mandatory auctions to allocate all capacity rights shorter than one year's duration on interstate natural gas pipelines. (See RM98-10-000, Regulation of Short-term Natural Gas Transportation Services, FERC, July 29, 1998.) At a technical conference held Oct.
A debate on the FERC proposal to put short-term capacity up for bid.
Last summer the Federal Energy Regulatory Commission truly outdid itself. In a move that left the gas industry speechless, the FERC proposed that it would remove all price controls or cost-based regulation for capacity rights shorter than one year's duration, and instead would resort to auctions for the purchase and sale of such "short-term" rights to transport natural gas on interstate pipelines.
The reason? The FERC said it wanted to level the field between short- and long-term contracts.
Applications filed to date in New England and California.
New England and California are hotbeds of merchant plant activity, as shown by a list of proposed projects submitted for certification with the appropriate state agencies as of early November. In New England alone, some 63 projects totaling generation of more than 31,000 megawatts (and growing) were proposed. It is generally understood, however, that of the 31,000 MW of generating capacity represented by those projects, only 7,000 to 8,000 MW will be built.
New England.
It's not as straightforward as it seems, says an industry veteran.
No one can foresee with a high degree of certainty how electric energy markets will be structured over the long-term. The changes facing the electric energy industry may be as profound as those upheavals we've seen in the airline industry during the past two decades. In the "good old days," a flight from New York to Chicago had one price and an electric generating plant had a regulated price for each kilowatt-hour produced.
Projects sprout in the United States and overseas, pushing the limits of grid capacity, turbine manufacturers and available sites.
Merchant power plants are emerging en masse to address the growing electricity needs of the United States and other countries, thanks to deregulation and fearless developers. While some plants are built to replace older, less-efficient utility-owned units, others would serve demand growth. Still more are planned as niche-oriented peakers - ready to supply the grid when marginal prices rise high enough. Ancillary services might offer another niche.
Mitigation depends on the market. For regulators, that means a going-forward view.
If regulators allow recovery of some stranded costs, they should at least ensure that utilities operate their generating plants in a manner consistent with the actions taken by other owners of similar resources that participate in competitive markets for bulk power.
A priori estimates of stranded costs are almost certain to be wrong. Therefore, regulators should adjust recovery to reflect actual events (em in particular market prices for electricity.
September meeting sends draft legislation back to the drawing board.
Reliability is a self-correcting issue (em if we let it slide, something will happen and it will be corrected ¼ [But] do you want the government to do it?"
That was one industry representative speaking of attempts by the North American Electric Reliability Council (known as NERC) to evolve into a self-regulating reliability organization, or SRRO.
Public power is competitive power, and that keeps IOUs on their toes.
There they go again. You know who I mean, the critics who fear us in a competitive electric utility environment, or who oppose, for ideological reasons, government involvement in the power business.
Charles E. Bayless, in his article "Time's Up for Public Power" (Public Utilities Fortnightly, July 1, 1998), offered up just the latest of these below-the-belt blows.
It's tempting to respond in kind to these critics. Why? Because they torture the facts and distort the record.
DTE Energy Technologies named G. Paul Horst company president. Horst was founder and first chief executive officer of Nematron Corp. He pioneered the use of industrial computers to provide operator-to-machine interfaces similar to ATM machines. Since 1995, Horst has served as a director of Interface Systems and a consultant to DTE Energy.
Randy Hardy, former CEO and administrator of Bonneville Power Administration, has formed the Hardy Energy Consulting firm. Hardy will work with the Washington, D.C.