Federal and state interests clash as the FERC battles California over the future of the state's power exchange.

The California Power Exchange will not outlive its four-year mandate because it cannot compete with lower-cost exchanges, such as the New York Mercantile Exchange, Automated Power Exchange and low-cost over-the-counter brokers. So says Edward Cazalet, chief executive officer at Automated Power Exchange and chief rival of the CalPX.

As the FERC ponders RTO structure, California's incumbent PX defends its unique design.

The great California debate - what role and structure for a power exchange? - once again is rearing its head, this time on the national scene. The resurgence of interest in regional transmission organizations, or RTOs, spurred by the recent Notice of Proposed Rulemaking[fn.1] issued in May by the Federal Energy Regulatory Commission, raises questions about the relationship between RTOs (designed primarily to manage grid operations) and power exchanges (seen as vehicles to facilitate trading).

Investors look at environmental ratings for link to stock performance.

While socially responsible investors have been interested in environmental performance for some time, mainstream utilities investors are looking at the issue for a different reason - environmental leaders consistently achieve better financial and stock market performance than their less eco-efficient competitors.

Online services are popping up - for commodity trading, retail marketing and back-office billing. But is the Web right for every application?

A recent study by Connecticut-based META Group Inc. finds that while less than 5 percent of all utility commerce will be conducted electronically in 1999, 30 percent of customer service and retail bill payments will flow over the Internet by 2004. That prediction highlights a torrent of Web activity in recent months, from power trading online to retail solicitations to electronic customer billing and payment.

Don't overlook impacts on power supply reliability, urges a consultant.

.Tx

Messrs. Cicchetti and Long deserve a round of applause for their insightful article, "Transmission Products and Pricing: Hidden Agendas in the ISO/Transco Debate," in the June 15, 1999, issue of Public Utilities Fortnightly.

They see utilities responding, but fear outlying areas are overlooked.

Despite reports of year 2000-readiness from virtually all electric utilities, and a promise from the U.S. Department of Energy to pressure the laggards, some customers still fear being left in the dark on Jan. 1, 2000. That view may surprise some, but it emerged clearly from the conference held in Chicago August 5-6 by the North American Electric Reliability Council, to update utilities and their customers on electric industry progress in Y2K problem mitigation.

News Digest was compiled by Carl J. Levesque, editorial assistant, Lori A. Burkhart, contributing legal editor, and Bruce W. Radford, editor. For continual news updates, see www.pur.com.Nuclear Power

Transmission & ISOs

Transco Independence. Granting Entergy's request for a declaratory order, the Federal Energy Regulatory Commission ruled in a case of first impression that a stand-alone transmission company ("transco") would meet the test in Order 888 for independent system operators despite passive ownership by a power producer or other market participant.

CMS Electric & Gas Co. named Frank Johnson vice president of international electric and gas distribution. He previously was the company's vice president of energy distribution.

J. Kay Smith was appointed vice president of corporate communications and public policy at Ameren Corp. Smith was promoted from assistant to the president for AmerenCIPS and manager of government affairs for Ameren Services.

Duke Energy International appointed David Weaver executive vice president for Europe.

MIT professor Paul Joskow asks the FERC how its rulemaking will help consumers.

By Aug. 23, the electric industry had filed over 150 separate comments - nearly 4,000 pages - telling the Federal Energy Regulatory Commission what it thinks about regional transmission organizations.

All other stories pale in comparison. The commission's proposed rulemaking on RTOs would reinvent the electric transmission business. The case gives economists a once-in-a-lifetime opportunity to instruct a government agency how to design and build a market from the ground up.