Information Technology for Utilities

IN THE DRIVE TO MATCH INFORMATION TECHNOLOGY SYSTEMS WITH THE

demands of "deregulatory" standards, utilities are investing billions in information technology (em some launching new business lines from their experience.

Worldwide, utilities are investing $20 billion; electric utilities pony up the most: $12 billion each year, according to Newton-Evans Research Co. An average U.S. electric utility will invest $43 million this year; a gas utility will invest $9 million.

Off Peak

Competition draws Christians, conspiracy theorists.

SO, WHO WANTS TO COMPETE AGAINST THE LOCAL UTILITIES? In most of the country, potential competitors tend to fall into three categories: (1) traditional utilities from within or nearby the affected state that wants to expand into foreign service territories; (2) unregulated subsidiaries of traditional utilities; or (3) power marketers and/or aggregators. In California, however, it's more of a mixed bag.

New Mexico Gas Choice Commitment

The New Mexico Public Utility Commission has authorized Public Service Company of New Mexico to launch a major new program to help small-volume end users take advantage of alternate gas supply sources.

The action follows an investigation by the commission of an offer by the utility to exit the gas merchant function.

Under the new program, small customers can purchase gas from a list of qualified marketers beginning with the first billing cycle for December 1997.

Carrier Balks at Pricing Set for Local Service

Further opening the local telephone market to competition in the state, the Michigan Public Service Commission has established guidelines for pricing unbundled network elements and set a wholesale rate for bundled local service.

The local exchange carrier, Ameritech Michigan, complained that the combined price of all unbundled services could fall lower than than the bundled wholesale rate.

The commission adopted a total-service, long-run, incremental cost study to calculate the new rate offerings.

LDCs Examine Hedging to Stabilize Gas Costs

Expressing concern about price volatility in the natural gas market, New Jersey, Virginia and Michigan regulators have directed local gas distribution companies to try fixed-price contracts and other hedging instruments. This would allay risk in wholesale gas supply portfolios and protect residential ratepayers from price swings common in the winter heating season, regulators said.

The growing popularity of fixed-price and other financial instruments to hedge against price spikes follows two winters of volatility noticed by regulators nationwide.

New Jersey.

California PBR Plan to Yield Savings

The California Public Utilities Commission approved a performance-based ratemaking plan for Southern California Gas Co. that could yield substantial savings, which the company is required to share with customers.

The PUC said the proposed merger of the utility's parent, Pacific Enterprises, and Enova Corp., parent company of San Diego Gas & Electric Co., should improve efficiency and benefit ratepayers.

Electric Pilot Uses Tariff Rate, Energy Credit

The New Jersey Board of Public Utilities has approved a pilot program for Jersey Central Power and Light Co. that will allow some of the utility's electric customers to choose a private energy supplier and then compare bills with and without retail competition.

JCP&L, an electric utility doing business as GPU Energy, serves more than 11,900 mostly residential customers in Monroe, N.J., the targeted town.

Idaho Reviews Surcharge for Conversation Research

The Idaho Public Utilities Commission has rejected a request by Idaho Power Co. to include a "public purpose charge" in ratepayer bills to fund its participation in the Northwest Energy Efficiency Alliance.

The utility said that the goal of the new organization is to transform existing energy markets to permit improvements in energy use efficiency without the need for long-term utility incentives.

The commission permitted the utility to capitalize and defer the costs of its investment in the organization until additional information is available.

Electric Utility Must Offer Stand-by Service at Market Rates

The Missouri Public Service Commission has directed Kansas City Power & Light Co. to offer stand-by electric services to self-generation customers at market-based prices.

The rate design approved by the commission allows the utility to recover stranded costs that might otherwise be shifted to customers who continue to take bundled electric service on the utility's regulated distribution system.

The PSC approved a plan proposed by its staff that would require the utility to employ "real-time pricing" for the energy component.