EV

Professor Shepherd sees selective price cutting as anti-competitive, but even a monopolist should be allowed to compete on price.

As the electric industry deregulates, state public utility commissions are asked increasingly to allow the local utility to offer price discounts to large-load customers who might otherwise turn to other sellers. So far, nearly all the PUCs faced with this issue have agreed that such discounts are beneficial: They help retain large-load customers, who help pay the utility's fixed costs.

A control area is like an airport (em too many planes, not enough runways.

SAN FRANCISCO, CALIFORNIA, AUGUST 21, 1996 - 8:35 A.M.

On Saturday, Aug. 10, 1996, a power outage left more than 4 million Californians without electricity, prompting the California Public Utilities Commission to conduct emergency hearings. Witnesses appeared from electric utilities and a host of federal and state agencies, including the Bonneville Power Administration, the U.S. Department of Energy, the Federal Energy Regulatory Commission and the Western Systems Coordinating Council.

Liberalisation of the electricity markets in the UK and Scandinavia has driven merger activity in these territories. This was evident in 1996 with U.S. companies taking over MEB, East Midlands Electricity and Northern Electric, with London Electricity likely to follow in early 1997.

Flexible prices make markets hum,

but discounts discriminate when monopolies rule.

Many expect that the electricity industry is moving inexorably toward a much-publicized "new competitive era." Companies, regulatory officials and experts all regard the momentum as powerful.

So far, the changes are just beginning, and there is a long way to go to reach fully effective competition. %n1%n Yet even at this early stage, the merger and pricing strategies adopted by the established electric firms may be threatening the prospects for competition.

Load Aggregation:

The Wolf at the Door?

Of course, there's nothing to stop a utility from aggregating its own customers.

WHAT, EXACTLY, IS LOAD "AGGREGATION?" Is it a threat, an opportunity, or merely a sales tactic?

Actions taken in California, as well as in pilot programs across the country, place customer aggregation on the leading edge of efforts to pull native load from electric utilities.

Ironically, present-day utilities already "aggregate" their customers (em albeit into a single group.

With its new agreement with the Bonneville Power Administration (BPA), power aggregator New Energy Ventures, Inc. (NEV) stands poised to enter California's retail market with the advent of competition.

NEV has agreed to purchase 200 megawatts (Mw) of surplus electricity from BPA for five years beginning January 1, 1998, with an option for an additional 200 Mw of surplus firm power for five years from the time the option is exercised. NEV also will purchase seasonal economy power, which sells for less than 1.5 cents per kilowatt-hour.

Light-handed or Light-headed?Customers didn't buy power on lay-away. So why should the CPUC exact interest?

In a recent dream, the Governor of California called to ask if I would accept an appointment to serve on the California Public Utilities Commission (CPUC). Of course I thanked him and said I was extremely flattered by the offer. However, I inquired, didn't he have an opening on the parole board or air resources board? You see, I know entirely too much about the thankless work of the CPUC.

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.

With little fanfare, most aspects of the U.S. energy system seem to have settled into a fairly stable, predictable pattern. To my mind, we have reached an "energy plateau" likely to persist for maybe a decade or more into the future.

Energy is not now high on the radar screen of the general public, so there is little public pressure for significant change in the U.S. energy system.

The California Public Utilities Commission (CPUC) has approved requests by the state's major energy utilities to maintain (and in some cases expand) funding for certain programs designed to aid in the development of low emission vehicles (LEV) and infrastructure. However, the CPUC approved less than the total requested by the state's energy utilities and stressed that ratepayer funding should not be used to support utility involvement in the competitive transportation market.