American Electric Power

Eight states blame upwind sources. Agency to revisit emissions targets.

The U.S. Environmental Protection Agency's Sept. 24 rule for 22 eastern states to file plans to reduce nitrogen oxide emissions would ostensibly reduce transport of ground-level ozone, or smog, in so-called "nonattainment areas." But eight of these affected states have filed petitions arguing that NOx emissions blowing in from nearby jurisdictions must be controlled before they can comply.

So far, in preliminary statements, the EPA has indicated that at least some of these petitions have merit.

Ohio's proposal for retail marketing areas would give all customers meaningful choice and all suppliers even footing.

When grocery shoppers go looking for a can of tuna fish, they must decide which brand to buy. No particular brand will jump off the shelf into their shopping carts. The same is true with automobiles or any other consumer good. First you choose a make and model. Electricity and other utilities, however, are a special case. In the transition from monopoly to competition, consumers face a different prospect.

The post-mortems on last summer's price spikes in the Midwest are in. At least three studies of the event diverge in their conclusions:

First, on Sept. 24 of last year, the staff of the Federal Energy Regulatory Commission found the root cause of the spikes in extreme weather and unexpected outages. It observed no direct evidence of market manipulation and concluded that the events were unlikely to recur.

As utility takeovers break new ground, the FERC ponders proposed rules, perhaps already out of date.

A year ago, when U.S. Antitrust Czar Joel Klein talked of a "window of opportunity" for electric utility mergers, he didn't predict when it would close.

And it hasn't yet.

In the 12 months leading up to January 1998, when Klein had addressed the Federal Energy Regulatory Commission through its "Distinguished Speakers" series, only the ill-timed Primergy deal had been turned down. The next year, 1998, would prove no different.

EPA inventory opens generators to scrutiny, especially if they burn coal.

Hazardous emissions are one thing. Damaging publicity is something else-especially in the point-and-click world of Internet access.

In the coming year, the fuels that utilities choose to generate electricity will fall under a stronger media microscope. That's when coal- and oil-fired electricity generators must begin reporting information about their accumulated releases of toxic chemicals for 1998.

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.

Shaky merger policy finds the FERC at war with itself.

"IN HIS DELIGHTFUL ARTICLE, "THE FOLKLORE OF Deregulation," published this summer in the Yale Journal on Regulation, federal judge Richard Cudahy notes the ethereal nature of "virtual electricity." This new product, he explains,"exists only as a blip on a computer screen and will never give one a shock." "Reality," he notes, has "retreated to the money part of the system."

We could use a dose of that reality in looking at electric utility mergers.

State PUCs

Electric Retail Choice. The Arkansas Public Service Commission has issued its final report on electric restructuring, citing a "broad" consensus favoring competition. It predicts immediate benefits for industrial customers, but warns that residential users likely will not see any quick rate cut. The PSC saw competition as consistent with action in neighboring states:

• Oklahoma. State law mandates retail choice by July 1, 2002.

• Mississippi. PSC plan would phase-in competition from 2001 to 2004.

• Missouri.

FERC

GAS PIPELINES. Noting a move toward shorter-term contracts since Order 636, the FERC on July 29 issued an "integrated package" of reform proposals for the natural gas pipeline industry: (1) specific measures in a notice of proposed rulemaking on short-term transportation (transactions shorter than one year); plus (2) an open-ended request for comments in a broader notice of inquiry. RM98-10-000, 84 FERC ¶61,985 [NOPR]; RM98- 12-000, 84FERC ¶61,087 NOI].

Darwin Subart was named assistant vice president, business development, of Williston Basin Interstate Pipeline Co., a subsidiary of MDU Resources Group Inc. Subart has served as the company's business development director since 1994.

Curt L. Meyer joined Peregrine Communications, a fiber-optic network provider, as a regional account manager. Most recently Meyer worked for Strom Engineering.

CMS Energy Corp. elected Kenneth L. Way to its board of directors. Way is chairman and CEO of Lear Corp. Way's election brings membership of the board to 11 directors.

Robert P.