Want auctions for gas capacity? Don't think pipeline. Think online.
In July 1998, the Federal Energy Regulatory Commission signaled its intent to try one more time to make greater use of electronic auctions in the pricing and allocation of regulated gas pipeline transmission capacity. The proposed rule, issued in Docket No. RM98-10, marks the third major effort by the commission in this area. Several workshops have already been held. Formal comments are due Jan. 22.
A tale of three deals - ADT, Westinghouse, KCPL - at Western Resources.
Sensing changes in the utility industry, Western Resources Inc. in 1994 began to examine what it was and what it needed to be - to customers, to investors and to other constituencies. Through an extended exercise in strategic planning, we produced a rather typical end product: a document outlining a hypothetical future of growth, financial strength and customer satisfaction.
As utility takeovers break new ground, the FERC ponders proposed rules, perhaps already out of date.
A year ago, when U.S. Antitrust Czar Joel Klein talked of a "window of opportunity" for electric utility mergers, he didn't predict when it would close.
And it hasn't yet.
In the 12 months leading up to January 1998, when Klein had addressed the Federal Energy Regulatory Commission through its "Distinguished Speakers" series, only the ill-timed Primergy deal had been turned down. The next year, 1998, would prove no different.
Auctioning gas imbalances offers advantages over bidding on available pipeline capacity.
In a Notice of Proposed Rulemaking issued last summer, the Federal Energy Regulatory Commission proposed a series of auctions for all unutilized short-term rights in pipeline capacity, with the most frequent auction being for transmission rights for the next day. All transporters and the pipeline would be required to release available short-term capacity rights to be auctioned. (See FERC Docket RM98-10-000, Regulation of Short-term Nat. Gas Transp.
Make gas pipeline rights more fungible, but draw the line at contingent bidding.
Last July the Federal Energy Regulatory Commission proposed mandatory auctions to allocate all capacity rights shorter than one year's duration on interstate natural gas pipelines. (See RM98-10-000, Regulation of Short-term Natural Gas Transportation Services, FERC, July 29, 1998.) At a technical conference held Oct.
A debate on the FERC proposal to put short-term capacity up for bid.
Last summer the Federal Energy Regulatory Commission truly outdid itself. In a move that left the gas industry speechless, the FERC proposed that it would remove all price controls or cost-based regulation for capacity rights shorter than one year's duration, and instead would resort to auctions for the purchase and sale of such "short-term" rights to transport natural gas on interstate pipelines.
The reason? The FERC said it wanted to level the field between short- and long-term contracts.
Projects sprout in the United States and overseas, pushing the limits of grid capacity, turbine manufacturers and available sites.
Merchant power plants are emerging en masse to address the growing electricity needs of the United States and other countries, thanks to deregulation and fearless developers. While some plants are built to replace older, less-efficient utility-owned units, others would serve demand growth. Still more are planned as niche-oriented peakers - ready to supply the grid when marginal prices rise high enough. Ancillary services might offer another niche.
September meeting sends draft legislation back to the drawing board.
Reliability is a self-correcting issue (em if we let it slide, something will happen and it will be corrected ¼ [But] do you want the government to do it?"
That was one industry representative speaking of attempts by the North American Electric Reliability Council (known as NERC) to evolve into a self-regulating reliability organization, or SRRO.
Shaky merger policy finds the FERC at war with itself.
"IN HIS DELIGHTFUL ARTICLE, "THE FOLKLORE OF Deregulation," published this summer in the Yale Journal on Regulation, federal judge Richard Cudahy notes the ethereal nature of "virtual electricity." This new product, he explains,"exists only as a blip on a computer screen and will never give one a shock." "Reality," he notes, has "retreated to the money part of the system."
We could use a dose of that reality in looking at electric utility mergers.
These executives are energizing the power business with their persistence, ideas and pure gut instincts.
What is an innovator? Must he, or she, be an inventor? Or merely an idea-prone CEO with a knack for building a string of successful companies? Or could an innovator be both a scientist and CEO?
In this first-ever feature, Fortnightly has chosen innovators from all segments of the energy business.