Want auctions for gas capacity? Don't think pipeline. Think online.

In July 1998, the Federal Energy Regulatory Commission signaled its intent to try one more time to make greater use of electronic auctions in the pricing and allocation of regulated gas pipeline transmission capacity. The proposed rule, issued in Docket No. RM98-10, marks the third major effort by the commission in this area. Several workshops have already been held. Formal comments are due Jan. 22.

Author Spratley argues that Fortnightly's title misrepresents his December article.

In Fortnightly's Dec. 1 issue, I was surprised to see you place a new title on my article about how states are leveraging system benefit charges to finance new photovoltaic (PV) projects (originally "Consumer Charges Power Solar Financing"). Your provocative title: "Solar Mandate? Like it or not, Consumers Pay" implies that consumers are bearing an enormous burden for solar power imposed by state policymakers.

Wholesale customer turns tables, threatens leveraged buyout against its own supplier.

Matanuska Electric Association, the largest customer of Alaska's Chugach Electric Association, has offered to acquire Chugach, the state's largest power company. But in launching the hostile takeover, Matanuska said it would pay not a cent to Chugach. Adding a new twist to the term "cooperative finance," the Matanuska co-op proposed a leveraged buy-out - a takeover strategy popular during the 1980s.

Consumers want one-stop shopping - everything in one package, and the telephone, too.

The role of the local electric utility could take on a much larger proportion if residential consumers and small business owners have their way.

These customers are increasingly interested in purchasing bundled products and services, according to a nationwide survey. And they're looking first to their local energy providers for additional services, even for products the suppliers have no experience providing, such as telecommunications.

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.

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.

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.

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.

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.

Auctioning gas imbalances offers advantages over bidding on available pipeline capacity.

In a Notice of Proposed Rulemaking issued last summer, the Federal Energy Regulatory Commission proposed a series of auctions for all unutilized short-term rights in pipeline capacity, with the most frequent auction being for transmission rights for the next day. All transporters and the pipeline would be required to release available short-term capacity rights to be auctioned. (See FERC Docket RM98-10-000, Regulation of Short-term Nat. Gas Transp.