FERC

The Federal Energy Regulatory Commission has moved closer to deciding the stranded cost dispute between Consumers Energy and the city of Alma, Mich., which intends to construct its own municipal electric system.

On Sept. 10, the FERC set for hearing two stranded cost issues: (1) whether Consumers Energy has met the "reasonable expectation" standard justifying stranded cost recovery from Alma; and (2) if so, what amount the utility may recover. (See, Docket No. sc97-4-000.)

Consumers Energy wants $56.1 million in stranded cost payments from Alma.

MCN Investment Corp. and Tennessee Gas Pipeline Co. plan to build a $45-million liquified natural gas plant near the Delaware-Maryland border. The project, named Continental States Peaking Services L.L.C., would liquify, store and vaporize gas beginning in early 2000. It would connect to the Eastern Shore Natural Gas pipeline system, with access to the Transcontinental Gas Pipe Line and Columbia Gas Transmission system.

The PJM Interconnection is what they call a "tight" power pool. As the Federal Energy Regulatory Commission has explained, tight power pools "extensively coordinate" their planning and operations, with central dispatch of generating plants. This coordination builds reliability--one of the long-term benefits, says the FERC, of a tight power pool.

Coordination also builds market power, however. And, as we all know from FERC Order 888, market power in transmission stands as "the single greatest impediment" to electricity competition.

California regulators have issued a series of important rulings this spring as they continue to move forward with restructuring the state's electric utility industry.

On May 6, the California Public Utilities Commission accelerated the pace of its industry reform by ordering all electric utilities in the state to allow direct access to alternate electricity suppliers for all customers on Jan. 1, 1998.

Marking the second time it had approved a union between an electric utility and a natural gas pipeline company since issuance of its December 1996 merger policy, the Federal Energy Regulatory Commission has approved the merger of Duke Power Co. with PanEnergy Corp.

In its 21-page order issued May 28, the FERC found the merger consistent with the public interest based on an examination of the effect it would have on rates, competition and regulation (Docket No. EC97-13-000).

The Federal Energy Regulatory Commission has granted two certificates for natural gas pipeline projects in the Southeastern U.S. One certificate went to Southern Natural Gas Co. for construction of a controversial pipeline to serve two municipal customers; a second was issued to Columbia Gas Transmission Corp. for the largest single expansion of its pipeline and storage system.

The FERC on May 28 voted 5-0 to grant a certificate to Southern Natural Gas Co. to construct approximately 118 miles of natural gas pipeline to serve two municipal customers.

Douglas W.

Feds prefer legislative solution for now, but warn of bid-rigging, cartel behavior later on, after deregulation.

One of the nation's top antitrust officials told the House Judiciary Committee in June that moves toward utility deregulation should focus first on open access to the transmission grid (em and then resolve that problem through rulemaking or legislation, not antitrust enforcement.

"Antitrust is probably not the best way to address access," said Robert Pitofsky, Federal Trade Commission chair.

The New York Public Service Commission has set up procedures to reimburse qualifying cogeneration and small power production facilities if any of the state's seven investor-owned electric utilities should curtail purchases of power from the QFs. The Independent Power Producers of New York Inc. blasted the decision.

The PSC said it will review QF requests for reimbursement if a utility is alleged to have curtailed purchases unfairly.

With electric bills in Congress, and Moler bound for DOE, the Commission needs new vision.

Speaking in May at an informal press luncheon at the Washington International Energy Group in Washington, D.C., FERC Commissioner William L. Massey described the Federal Energy Regulatory Commission's role in an open-access electric industry as "nourishing" competition.