THE PRICING TURMOIL THAT STRUCK MIDWEST POWER markets during the week of June 22, with allegations of price gouging and calls for a wholesale price cap imposed by the Federal Energy Regulatory Commission (see Docket EL98-53), made for good copy but has obscured what's really going on.
"In the pleadings to FERC, I saw no evidence of price gouging," says attorney Jeffrey Watkiss, who represents power marketers who have asked the Commission for wholesale market reform.
THE LAST FEW TIMES I'VE HIT THE ROAD FOR A INDUSTRY conference or speaking engagement, someone invariably has come up to tell me how my picture on this page seems to be getting younger. OK, I confess. Like many other columnists, I've probably carried on too long with the same old photo.
ARE UTILITIES STOCKS STILL MAKING WIDOWS AND orphans happy?
According to PaineWebber's report, Power Book, utility stocks "are likely to continue to lag the market." Of the 66 electric utilities surveyed, only 9 earned a "buy," or "1," recommendation, and six scored "unattractive," or a "4" rating (see table). The rest fell somewhere between, their stocks labeled either "attractive," or "neutral."
While a merger can bolster a company's potential, it isn't a sure bet. Cinergy Corp.
ENTERGY Power Group named Charles J. Brown III group president of development. Previously, Brown was responsible for Entergy's European project development.
Shahid J. Malik was promoted from senior vice president and COO to president and CEO of Entergy Power Marketing Corp. Malik joined the company in February 1997.
Ameren Energy, Ameren Corp.'s new independent energy marketing and trading affiliate, named Shannon B. Burchett president. Burchett previously served as senior vice president of marketing with Duke/Louis Dreyfus.
Harold W.
EL NIÑO HAS STRUCK, WITH NO END IN SIGHT.
Consider that Aquila Energy, the marketing arm of UtiliCorp United, has announced a new financial derivative, known as GuaranteedForecast,sm to hedge the weather against forecasts by the National Weather Service. The new product will pay holders a guaranteed amount if the mercury strays, and Aquila touts its thermometer hedge for any of 170 U.S. cities (em be it Spokane, El Paso, Chicago or New York. Why talk about the weather when you can invest in it, in true '90s fashion?
For this heating season, however, it may be too late.
State Legislatures
UTILITY HOUSE CALLS. Michigan Gov. John Engler (R) signed into law a bill making it a felony to impersonate a utility employee to enter private property for criminal purposes. The new law calls for those convicted to be imprisoned for not more than two years and to pay a maximum fine of $1,000, or both.
ELECTRIC RESTRUCTURING. Illinois Gov. Jim Edgar (R) signed into law an electric restructuring bill for the state. Edgar noted that concerns over the bill were addressed by the state's two largest utilities, Commonwealth Edison and Illinois Power Co.
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.
Federal Agencies
Nuclear Plant Fines. The Nuclear Regulatory Commis-
sion has proposed fines totaling $2.1 million against Northeast Nuclear Energy Co. for many violations at the company's Millstone nuclear plant in Waterford, Conn. The fine marks the largest civil penalty ever proposed by the NRC. Northeast Utilities said it will pay the fine, which it called "a necessary and important step toward bringing to closure a very disappointing and difficult chapter in the company's history." The utility said it will not pass the cost onto ratepayers.
Electric Futures.
IN THE EARLY 1970s, WHEN THE "ENERGY CRISIS" DAWNED, New York told electric utilities to stop advertising to promote electric use. State judges deemed such promotion as lacking in "any beneficial content," or even "detrimental to society." It took an appeal to the U.S. Supreme Court for utilities to win the right to tout their product.
Today's questions target the bottom line: Can advertising boost sales for energy suppliers? If so, what does it take?
CINERGY MERGER CONDITIONS. FERC allows two-year deferral of prior requirement (a condition of the 1993 Cinergy merger) for Cincinnati Gas & Electric Co. and PSI Energy Co. to build a 345-kV transmission line by 2000 to link territories to guarantee central dispatch for generation. Cinergy says it can now duplicate the capacity with open access. FERC Chair James Hoecker concurs, citing "further evidence that the bulk power market is working." (Docket No. EC93- 6-004, Sept. 24, 1997)
Hydro Licensing.