EARLIER IN THIS DECADE, FERC CHAIRMAN MARTIN ALLDAY delivered his famous quote: "Everybody is somebody's native load customer."
Today, that truism has fallen under attack. It could go out the window if power marketers get their wish. One group of marketers has asked the Federal Energy Regulatory Commission to open a new rulemaking on electric system reliability. This group proposes to end the notion of transmission responding to load.
ARE NATURAL GAS UTILITIES DIFFERENT FROM THEIR ELECtric counterparts? Now that customer choice has become available in a few spots on the East and West coasts, can we expect some of the same opportunities to open up for gas consumers? Or are the industries incomparable, without lessons to learn from each other?
ON MARCH 26, JUST BEFORE IT OPENED THE STATE'S electricity market at midnight on the 31st, the California Public Utilities Commission announced new interim rules to protect consumers, plus this warning: "Any entity who is considering doing anything contrary to [state law] regarding electric restructuring, and [this] decision adopting such safeguards, should think twice."
Ostensibly, that advice followed from last year's passage of State S.B.
ARE UTILITIES STOCKS STILL MAKING WIDOWS AND orphans happy?
According to PaineWebber's report, Power Book, utility stocks "are likely to continue to lag the market." Of the 66 electric utilities surveyed, only 9 earned a "buy," or "1," recommendation, and six scored "unattractive," or a "4" rating (see table). The rest fell somewhere between, their stocks labeled either "attractive," or "neutral."
While a merger can bolster a company's potential, it isn't a sure bet. Cinergy Corp.
WHETHER DOING BUSINESS IN SANTIAGO OR Krakow, Budapest or Bang Kraui, American energy service companies agree: It's tough to find a lender to finance international projects.
ESCO executives working around the globe met to commiserate at the International Roundtable on Energy Efficiency Financing Feb. 26-27 at the Ritz-Carlton Hotel in Arlington, Va. Sponsors of the Roundtable included the National Association of Energy Service Companies and the Export-Import Bank of the United States.
AMERICANS ARE fascinated with lists. There are lists of just about anything you can name, from the Fortune 500 to baseball batting averages. There's even a book of lists. We especially like to rank "top tens," like the 10 best cities to live in or the 10 worst school districts in America. Television has popularized these lists.
MICHIGAN CHOICE APPEAL. Michigan Attorney General Frank Kelley filed an appeal in the Michigan Court of Appeals of the Michigan PSC's Jan. 14 rehearing order (News Digest, March 15, 1998, p. 18) adopting a phase-in schedule for electric restructuring and retail choice for Consumers Energy and Detroit Edison. Kelley alleged that the order fails to create a competitive generation market or foster lower rates. He called it an "outrage," that gave the utilities everything they wanted. Case Nos. u-11290 et al., Feb. 13, 1998 (Mich.P.S.C.).
NEW HAMPSHIRE RESTRUCTURING. The U.S.
BY THE END OF MARCH, CALIFORNIA, RHODE ISLAND, and Massachusetts planned to offer retail choice to customers. However, early signs suggest electric competition may fall short of expectations due to stranded cost recovery mechanisms and the desire of customers to protect themselves from risks inherent in a competitive market.
When the California market was about open, less than 5 percent of customers had elected to switch suppliers.
DEPRECIATION, DEFERRAL, DENIAL. I have often discussed in Public Utilities Fortnightly the tendency for regulation to defer the recording and recovery of depreciation expenses. Therefore, Mr. William C. Schaeffer's discussion of this subject in the February 1, 1998 issue (see "Mail," p. 11) attracted my attention, especially his quoted claim of the Delaware public advocate that investors should be neutral to depreciation deferral on a present value basis.
My experience has been that present value arguments in regulatory proceedings relative to depreciation are in support of deferral.
ON ECONOMICS OF RELIABILITY. I think Karl Stahlkopf's and Philip P. Sharp's comments on reliability ("Reliability in Power Delivery: Where Technology and Politics Meet," Jan. 15, 1998) fail on three issues, all of them involving money.
First, the authors imply annual savings "from deregulation" of around $9 billion per year. Are we really going through all this trouble for so little? Or has something been lost in the rounding process?
Second, they assert that the cost of power disturbances are $26 billion per year.