American Electric Power

An interview with Ralph Masiello

and Sue Scott of ABB

The big, traditional projects in automated meter reading have really stalled, because utilities are no longer assured of a return on investment."

That warning comes from Ralph D. Masiello, vice president and general manager, ABB Power T&D Co. Inc., the leading manufacturer of electric meters in North America.

"We used to understand the economics of AMR. Just compare the cost of AMR against the cost of metering. But now the economics have changed.

Appearing as tree huggers, utilities draw skeptical reaction from environmentalists.

At first glance, it looks like the same old story: Environmentalists versus utilities. But this time, the utilities are the ones fighting for the forests (em with a twist.

Utilities, major producers of carbon dioxide, believe they've found a cost-effective way to offset emissions through carbon sequestration, or sinks, which means converting pastures to forests or maintaining old-growth groves.

But environmentalists call it an easy way out.

Edison International elected former U.S. Secretary of State Warren Christopher to its board and its utility company's board, Southern California Edison. Christopher was elected chair of the executive committees of both boards. Howard P. Allen retired as chair and CEO.

John T. Coughlin, former Wisconsin Public Service commissioner, was elected chair of the PJM Interconnection L.L.C.

Former U.S. Department of State Legal Adviser Conrad K. Harper was elected to the board of both Public Service Enterprise Group Inc., and Public Service Electric and Gas Co.

Changing the culture at American Electric Power.

As the electric industry gears up for competition, attention shifts to things like load migration, technology and customer service. The pressure is rising like never before to identify, catalogue and track costs.

Thus, at American Electric Power Company, we decided two years ago to reengineer much of our internal financial management apparatus, including systems, databases and technology. With the help of consultants, we developed, designed, tested and implemented an activity-based management system.

New England states, feeling threatened by increased pollution from Midwest coal-fired generation, recently began lobbying for tougher national environmental standards tied to electric deregulation legislation. The perceived threat is based on the belief that coal-fired plants in the Midwest with excess capacity will increase exports to higher-cost New England states. This increased generation and exportation could lead to more pollution in the New England states.

Speaking on June 11 in Washington, D.C., at a symposium sponsored by the Institute of Electrical and Electronics Engineers, Rep. dan Schaefer (R-Colo.) was heard to say that he would have his electric restructuring bill out of committee by the end of July. He said his bill would mandate electric competition by 2000--just the sort of deadline that Texas Public Utility Commission Chair Robert Gee likes to call a "Hong Kong" clause.

Will the millennium bring the dawn of customer choice? Here we are, halfway through 1997. Hong Kong is now Chinese, but in America we are still ratepayers.

New Environmental Technologies Inc. agreed to acquire Keystone Energy Services Inc. The new company will be called Keystone Energy Services. In an alliance with New Energy Ventures Inc., it plans to target the $22.5-billion California electric market. Keystone will re-sell part of the $500 million worth of power New Energy Ventures recently agreed to buy from the Bonneville Power Administration. Keystone will focus on small- to medium-sized electric consumers while its partner will target industrial, commercial and government accounts.

The California Public Utilities Commission elected members to two boards overseeing energy efficiency and low-income programs. The board for energy efficiency programs members are: Acting Chair Sara Steck Myers, CEERT; Dave Gamson, CPUC commissioner advisor; Michael Messenger, California Energy Commission; Peter Miller, Natural Resources Defense Council; Mark Thayer, San Diego State University; Ortensia Lopez, Greenlining Institute; Charles Goldman, Lawrence Berkeley Laboratory; Michael Shame, UCAN; and Don Schultz, CPUC Office of Ratepayer Advocates.

Do mergers and "critical mass" really make a difference? The answer, it seems, is yes.

To become more competitive, U.S. electric utilities have embarked on a quest in recent years to improve operational efficiency and factor productivity. The question is: Are utilities making progress? And, which companies have gained a competitive edge? Which have not?

Industry analysts have long argued that given the structure of the markets they serve and their cost-based, rate-setting procedures, electric utilities tend toward monopolistic behavior.

Five utility companies have filed a lawsuit in U.S. District Court in Birmingham against the Tennessee Valley Authority to bar it from making sales to unauthorized third parties for resale outside TVA's service territory, claiming such sales violate the TVA Act.

"TVA is under more intense attack from private utilities than at any time in its history," said TVA Chair Craven Crowell at an April 15 at a meeting of the TVA Caucus in Washington, D.C.