FOR ALL THE ATTENTION FOCUSED ON NEW LAWS AND regulations designed to create competition in electric power markets, too few people seem to grasp how a market can work. That will change, however, now that Pennsylvania is the first large state to embrace market pricing.
Pennsylvania's lawmakers and three of its five utility commissioners have developed a market to deliver the benefits of competition to consumers.
THREE FACTORS (em RESTRUCTURING, TECHNOLOGY AND environmental controls (em now create both reason and opportunity for electric utilities to lower their property taxes, which often make up a substantial cost of doing business.
Property tax valuation is fairly straightforward. Most states compute property taxes on fair market value, or what a hypothetical buyer and seller would agree the property is worth, with both parties having knowledge of the relevant facts and neither compelled to buy or sell.
THE CALIFORNIA DEBATE OVER ELECTRIC RESTRUCTURING IS now nearly four years old. And though it is nearing its final stages (the opening is now set for March 31), some of the most important questions as to how this will work in practice are just emerging.
The original bargain had called for the state's three large investor-owned utilities to vest basic control of their transmission networks in the new independent system operator in exchange for maintaining combined ownership of generation and transmission assets (and for a good level of assured stranded cost recovery).
AMID WORRIES THAT RESIDENTIAL CONSUMERS MAY NOT benefit from competition comes a study that shows at least one industry will: metering. This market is expected to grow an average of 5 percent per year through 2002.
By 2002, the metering industry is expected to be worth $3.1 billion, up from $2.4 billion last year, says Metering for Utilities: Riding the Wave of Deregulation, a new book from Business Communications Co.
Overall, meter reading systems are expected to log the highest average annual growth rate, about 16 percent each year over the next five years.
THE COALITION OF utilities calling to "Repeal PUHCA Now!" has pulled together a first-class team of lobbyists. They have been working intensely on Capitol Hill for more than two years. But they haven't won the easy victory they thought was within their grasp when the Republicans took over the Congress in 1994. The major flaw in the coalition's approach is classic: The pro-repeal lobbyists have been tireless talkers, but poor listeners.
POWER PLANT SALE. Central Maine Power Co. has agreed to
sell its hydroelectric, fossil and biomass power plants totaling 1,185-MW of generating capacity to FPL Group, the holding company of Florida Power and Light. The sale price of $846 million exceeds book value and could permit up to a 10-percent rate cut for customers by the end of the year.
OHIO/TEXAS DEAL. Ohio-based American Electric Power
Co. and Texas-based Central and South West Corp. on Dec.
THE former chairman of the Missouri Public Service Commission, Karl Zobrist, is now a partner at Blackwell Sanders Matheny Weary & Lombardi LLP.
Zobrist resigned from the commission on Aug. 15, 1997.
Robert C. Kelly, former chairman and CEO of Enron Renewable Energy Corp., was named managing director of renewable energy for Enron International.
Steven J. Lewis joined AEP Energy Services Inc. as senior vice president of energy services. Previously, Lewis managed trading of natural gas and electricity for Duke/Louis Dreyfus LLC.
Michael P.
AS YOU CHILL OUT IN YOUR TV CHAIR, WATCHING THE Winter Olympics from Nagano, Japan, think a moment about Kyoto, not far away, and what the climate change treaty might have in store.
On Jan. 8, federal climatologist Tom Karl announced that 1997 was the warmest year on record, with thermometer readings exceeding the mean (1961-90) by 0.42 degrees centigrade (0.75 degrees Fahrenheit). Writing in his World Climate Report, editor Patrick J. Michaels took Karl to task for reporting only half the story.
RDI'S NEW STUDY, THE CONVERGENCE OF GAS AND POWER: Causes and Consequences, projects gas consumption in the United States will grow 2.4 percent per year, or a 26.8-percent increase from 1998 to 2007.
Overall, demand is expected to grow from 20.5 trillion cubic feet in 1998 to 26 Tcf in 2007. More than half of this projected growth will come from electric industry demand for gas, which will increase from 4.1 Tcf in 1998 to 6.9 Tcf in 2007, or 5.3 percent per year.
The jump in gas consumption is linked to the electric industry's limited range of choices for new capacity.
THE RESIDENTIAL MARKET STANDS AS THE NEXT FRONTIER for natural gas unbundling. In California, Illinois, Maryland, Massachusetts, New Jersey, New York, Ohio, Pennsylvania and elsewhere, states have introduced pilot programs and other unbundling efforts to target residential gas consumers. %n1%n
These efforts are hardly surprising. The residential market, presently dominated by the regulated local distribution companies, appears lucrative. In 1995, the residential sector of the U.S.