FERC

RELENTLESS. That's the word consultant Benjamin Schlesinger uses to describe the growing share of North American markets claimed by natural gas produced in the U.S. Rocky Mountain region, the San Juan basin and western Canada.

"Western gas has climbed steadily, from 21 percent of North American gas production in 1975, to 33 percent in 1995," says Schlesinger, president of Benjamin Schlesinger & Associates Inc., Bethesda, Md. "It looks like that figure will reach 35 percent in the next few years.

THE U.S. TREASURY DEPARTMENT HAS ISSUED RULES that will allow all public power systems to participate in independent system operators without risk of losing the tax-exempt status of their bonds.

Investor-owned utilities are not happy. According to the Edison Electric Institute, the regulations significantly expand the ability of large government-owned electric utilities to use federal subsidies to compete against private utilities.

Meanwhile, the American Public Power Association is pleased that the rules passed Jan.

TWO RECENT shocks could turn up the pressure on Canada's two state electricity giants to deregulate.

After January's ice storm, about half Quebec's population went without heat or light for up to a month (em at the coldest time of the year. Almost one-quarter of the provincial economy was shut down. It was the continent's worst-ever blackout and Canada's worst natural disaster. It cost Quebec 1 percent of its flagging gross domestic product.

The ice storm affected Ontario Hydro much less.

State Legislatures

CALIFORNIA ELECTRIC RESTRUCTURING. California Assemblywoman Diane Martinez, chairwoman of the Utilities and Commerce Committee, has introduced two new bills aimed at protecting consumers in a competitive market. But the measures already have been put on hold for this year. The first bill, AB 579, would cut rates for residential and small-volume commercial customers by 20 percent, rather than by 10 percent as promised in the state's restructuring act, AB 1890.

THE PEOPLE HAVE spoken. They want choice in power supply in California and in other states. But people are also "load," at least in utility parlance. And some load in some areas can prove awfully difficult to serve. They're called "load pockets."

The Challenge

A load pocket is formed when a deficiency in transmission capacity to a market area cannot be priced away sufficiently to clear the market during peak-load periods. Consequently, the market area must rely on "must-run," local generation units during part of or all of the year.

State Legislatures

UTILITY HOUSE CALLS. Michigan Gov. John Engler (R) signed into law a bill making it a felony to impersonate a utility employee to enter private property for criminal purposes. The new law calls for those convicted to be imprisoned for not more than two years and to pay a maximum fine of $1,000, or both.

ELECTRIC RESTRUCTURING. Illinois Gov. Jim Edgar (R) signed into law an electric restructuring bill for the state. Edgar noted that concerns over the bill were addressed by the state's two largest utilities, Commonwealth Edison and Illinois Power Co.

THE board of trustees for Con Edison named James P. O'Brien general auditor. O'Brien joined Con Edison in 1972 after serving in the U.S. Navy. He will replace Lawrence F. Travaglia who is retiring.

Consolidated Natural Gas Co. named Elena C. Mola vice president, Latin America/Europe, of its subsidiary CNG International.

Siemens Power Transmission and Distribution named David Johnson vice president of its distribution automation division.

The Energen board of directors announced two promotions.

WELCOME BACK, MY FRIENDS, TO THE SHOW that never ends."

So said two weary commission staffers, trudging out of the hearing room late Friday afternoon, Jan. 31, as the Federal Energy Regulatory Commission adjourned its technical conference on the financial outlook for natural gas pipelines.

The hearing ran way behind schedule (em further evidence that before she left last summer for the Department of Energy, former FERC Chairwoman Elizabeth Moler neglected to pass along to successor James Hoecker whatever gene she possessed that allowed her to keep meetings moving right along.

DOES IT MATTER THAT NEW YORK'S PROPOSED RELIAbility Council won't be truly independent, even though its distinctly separate independent system operator now plans to require pristine board membership?

Both organizations begin operating as early as July. On paper, any conflict between market needs (i.e. generation) and reliability issues (largely transmission and distribution) will head to the state public service commission or FERC. But reality may force that hand in the effort to restructure New York's wholesale market.

On Dec.

THREE FACTORS (em RESTRUCTURING, TECHNOLOGY AND environmental controls (em now create both reason and opportunity for electric utilities to lower their property taxes, which often make up a substantial cost of doing business.

Property tax valuation is fairly straightforward. Most states compute property taxes on fair market value, or what a hypothetical buyer and seller would agree the property is worth, with both parties having knowledge of the relevant facts and neither compelled to buy or sell.