Federal Energy Regulatory Commission

Charles B. Curtis, deputy secretary of the U.S. Department of Energy, spoke on the world energy balance and its impact on U.S. markets at the American Gas Association (A.G.A.) Natural Gas Roundtable on April 2 in Washington, DC. Curtis pointed out the security implications of the latest Energy Information Administration (EIA) forecast that global demand for oil might reach an additional 20 million barrels a day by 2010, and that the Persian Gulf would likely supply 75 percent of that demand.

El Paso Natural Gas Co. (EPNG) has filed a settlement at the Federal Energy Regulatory Commission (FERC) that resolves its general rate case with natural gas pipeline customers such as Southern California Gas Co. (SCG) as well as the question of who pays for unsubscribed capacity.

Months of confidential negotiations resulted in agreements with 95 percent of EPNG's customers, and with the California, Nevada, and Arizona commissions.

Stranded investment is mostly intrastate.

Let the states work free of uncertainty.

Recent activity in both chambers of the U. S. Congress shows federal lawmakers seeking to help the electric industry move toward competition. More than likely, election-year politics will stand in the way. Even so, Congress can go one better: It can step aside and let the states lead the way.

The greatest concern lies in stranded costs (em utility assets and obligations valued on company books at above-market levels.

Michael Baly, American Gas Association president and CEO, will chair the National Energy Foundation. He replaces Richard Lawson, president of the National Mining Association. Arthur Wiese, Jr., public affairs v.p. of the American Petroleum Institute, was elected vice chair.

Attorney Karen A. Tomcala was promoted to the staff of James J. Hoecker at the Federal Energy Regulatory Commission. Previously, Tomcala practiced in the FERC's electric rates and corporate regulation section.

Oliver Richard is a gas man. His career includes a stint at the Federal Energy Regulatory Commission, as well as at Tenngasco, Northern Natural Gas Co., Enron, New Jersey Resources Corp., and The Columbia Gas System, Inc. Now he's found a new calling. He wants to be an ad man.

Several weeks ago I heard Richard describe his idea for the perfect 30-second TV spot to plug natural gas. Two utility CEOs are on the golf course. "Electricity costs too much," says one. "Some towns can't get gas service," says the other.

So the Federal Energy Regulatory Commission (FERC) won't break up the electric utility industry. But it may happen anyway (em if not at the FERC's direction, then perhaps under pressure from state regulators who, some say, are threatening to link stranded-cost recovery to vertical disaggregation.

What would a breakup mean for bonds and bondholders?

As we reported last month ("New Corporate Structures Place Bondholders at Risk," May 1, 1996, p.

The prospect of deregulation has induced a wave of mergers among electric utilities. Most of these mergers would fail an antitrust review because, by combining generation assets of interconnected utilities, they have substantially reduced potential competition in generation.

The New England Electric System (NEES) has filed with the Federal Energy Regulatory Commission (FERC) and the Securities and Exchange Commission for authority to separate

generation and transmission, and to create a

transmission subsidiary called NEES Transmission Services, Inc. NEES Transmission has filed proposed transmission tariffs at the FERC that would give its wholesale customers, including New England Power Co.

The Federal Energy Regulatory Commission (FERC) has conditionally allowed QST Energy Trading, Inc., a subsidiary of Central Illinois Light Co. to make sales to nonaffiliates as well as to an affiliate, QST Energy, Inc. (FERC Docket No. ER96-553-000). In turn, QST Energy would sell power in Illinois to customers located outside the service territory of Central Illinois.