GE

STATE PUCS

Distributed Generation. In December and January the Illinois commission took comments from utilities, marketers, manufacturers, and trade and advocacy groups on how to develop policy on distributed generation.

* Rulemaking Strategy. Enron has urged the state to proceed in a fashion similar to the California PUC's

two-track investigation. It asked for two separate rulemakings on (1) interconnection standards for DG installations of 50 megawatts or less, and (2) rate design and operational issues.

* Unit Size Limits.

The top traders, investors and managers tell why energy convergence is still a pipe dream.

[Graphic tables included in the print version of the Fortnightly are not included in this electronic version.]

Energy investors seemed less willing in 1999 to greet electric/gas combination mergers with the kind of blind enthusiasm they tended to show in prior years.

Instead, they now demand proof that energy convergence really does create tangible value beyond the mere sum of the parts. At least that's the impression gained from talking with John W.

How 165 lawyers were mostly on the wrong side in the biggest electric merger to date.

With Warren Buffet buying up MidAmerican Energy as his own personal utility, and Bill Gates taking a stake in Avista, the standard electric merger starts to look tame.

For that and other reasons, I believe it's all but certain that the Federal Energy Regulatory Commission will soon OK the electric industry's biggest-ever merger, combining American Electric Power Co. with Central and South West Corp.

California has a plan to track green electricity, but can it be trusted?

All electricity is the same, but the California Energy Commission wants to change that. It plans a system to authenticate the source of electricity to allow consumers to buy power from specific generators. Standard documents called "Certificates of Specific Generation" would certify financial transactions. Presumably, the plan would help document the authenticity of non-generic electricity products, such as green power.

Agency moves ahead despite ruling that Clean Air Act is unconstitutional.

By granting petitions filed by four Northeastern states seeking to reduce ozone pollution in their geographic areas through reductions in nitrogen oxide emission (NOx) from out-of-state sources, along with other initiatives, the Environmental Protection Agency on Dec. 17 began to clean the regulatory air that has grown murky as of late.

Reliant Energy's Don D. Jordan retired from his position as chairman of the board Dec. 31. R. Steve Letbetter, who had served as president and chief executive officer since June, has been named chairman, president and chief executive officer. Jordan served as CEO of Reliant Energy and its predecessor companies for 23 years, one of the longest tenures as a chief executive among major companies in Houston and in the energy business.

Matthew C. Cordaro has been appointed president and CEO of the Midwest Independent Transmission System Operator.

State PUCs

Gas Retail Rate Design. In a move toward equalizing rates of return between customer classes, the Oregon PUC authorized Northwest Natural Gas Co. to increase base rates by nearly $246,000, at the same time boosting residential rates by 1.3 percent but lowering rates for large commercial and industrial users. It set return on equity at 10.25 percent, finding the rate "consistent with the downward trend of ROEs authorized by other regulatory commissions." Order No. 99-697, Nov. 12, 1999 (Ore.P.U.C.).

Electric Restructuring.

A century gone by and we're still no closer to real choice in electricity.

The magazine being what it is, this column usually goes to press at least three weeks ahead of the cover date. Ordinarily I try to anticipate some upcoming event before the fact.

With this issue, however, the job gets tougher. It's more than a new year. In the popular view it's a new century. (But mathematicians know the Millennium begins in 2001.)

Did the electric grid crash on Jan. 1? Did the Federal Energy Regulatory Commission announce its new rule on regional transmission organizations on Dec.

Developers launch 70,000 MW of new capacity in Texas, PJM and New York state, but how much will get built?

It's so hot down here, it isn't funny," laughed Ken Donohoo, senior transmission systems engineer at the Electric Reliability Council of Texas independent system operator. But no, he wasn't talking about last summer's scorching temperatures.

Instead, Donohoo was referring to some 30,000-plus megawatts of generation capacity proposed to be built in ERCOT between 2001 and 2003.

An industry booster looks at the forecasts for price and technology and sees some big "ifs" for modular, on-site and distributed applications.

I'm a believer from way back in using natural gas for modular, on-site and distributed generation. But I worry that we might be overselling it.

Certainly, the idea of a natural gas fuel cell in every home basement needs careful examination. Add to that the notion that we can replace much of our commercial power demand with gas-fired systems such as fuel cells and microturbines.