Stranded-
Cost
Recovery: All FERC'ed Up
By Michael T. Maloney, Robert E.
McCormick, and Chad A. McGowan
The "lost-revenues" approach in Order 888 ignores the fact that cash flow drives
asset valuation . . .
. . . the key to measuring uneconomic investment.
Schaefer measure wins praise from UtiliCorp, Enron, and others, but EEI wants relief on stranded costs."The Electricity Consumers Power to Choose Act," introduced by Rep. Dan Schaefer (R-CO), while designed to bring competition to the electric industry, has definitely attracted controversy. The bill has evoked strong reactions from industry players as well as intense lobbying efforts on the part of promoters and detractors. Everyone, it seems, wants to put in their two cents as the bill makes its way across Capitol Hill.
Can DSM live with
competition?
Between 1992 and 1994, demand-side management (DSM) spending grew at a median annual rate of 16 percent for a survey group of 37 electric utilities (those reporting DSM expenditures of at least $5 million for 1993). For 1994-98, however, the same utilities project a median annual decline of 3 percent in their DSM expenditures. (Taken together, the 37 utilities - located primarily along the east and west coasts and in the industrial Midwest - accounted for 51.9 percent of all DSM expenditures for U.S.
The 129 federally owned plants that make up the five PMAs generate about 6 percent of the electricity sold in the United States.1 By law, the PMAs sell wholesale power at cost to legally stipulated "preference customers" (em i.e., municipal utilities and rural electric cooperatives.
California's retreat from its zero-emission targets eases the pressure on utilities, making time for a fresh look at public and private efforts.
Electric vehicles (EVs) hold interest for utility companies around the world.
On a bookshelf behind my desk I've stacked up a few older issues of PUBLIC UTILITIES FORTNIGHTLY. Some of them go back more than a half-century. Every so often I pull down a copy to see if I can learn anything from history.
Yes, the advertisements appear quaint (Royal typewriters; IBM punch-card machines; Ditto-brand duplicators). But some of the ideas still have legs, with lively quotations from the likes of Louis Brandeis, Harold Ickes, Walter Lippmann, and Fiorello La Guardia.
What are the essential characteristics of the system of governance that will be required for a new, North American electric industry with interconnected and interdependent transmission networks and trading areas?
Electric transmission networks are natural monopolies, as are the many independent network
control systems that coordinate the use of generators and loads and preserve system reliability.
To what extent should regulation yield to market forces in setting wholesale electric prices? The Federal Energy Regulatory Commission (FERC) posed this question when it sought comments on whether open transmission access would eliminate the need for anything like traditional rate regulation.
A broad coalition of Minnesota electric cooperatives, municipal utilities, consumer advocates, and environmentalists has joined the debate over the restructuring of the state's electric industry.
Electric utilities nationwide are attempting to retreat from commitments to energy efficiency (em a retreat that will benefit few customers, while damaging many. This retreat is driven by fear of retail wheeling (em that consumers will be able to shop for the lowest prices among competing entities. In turn, the threat of retail wheeling has spurred utilities to a frantic scramble to cut costs and trim rates.