IOUs

But preference customers still remain a "vocal political force."

With eyes turned again toward Congress, and possible energy legislation, opponents have thrown up yet another challenge to the sale of low-cost, allegedly subsidized power by the federal power marketing administrations. This time, congressional foes of PMAs have gained allies in several investor-owned utilities and in the findings of a report from the U.S. General Accounting Office, requested last year by Congress to aid its deliberations on electric restructuring.

PUCs turn their attention to what they can still control.

The battleground has shifted. Utilities that last year worried about winning customers in pilot programs for retail choice now face public audits on the reliability of transmission and distribution.

With rate cases in remission, no nukes on order and generation planning left to the market, public utility commissions are turning their attention to what they can still regulate. That means service quality. Nor are PUCs the only ones involved.

The state foots the bill, while northern neighbors profit from a managed power market.

California's electric restructuring plan, launched on April 1, 1998, marks one of the most ambitious attempts in U.S. history to place the state in a social engineering role. Not only was the scale of the project daunting, with implementation cost estimates running as high as $1.2 billion, but the plan places California government in control of the most minute components of the electric system.

How has the experiment gone?

Co-ops beat utility rates in 15 states. But why not more?

Despite the fact that their customers are scattered throughout the most remote reaches of the 46 U.S. states they service, electrical cooperatives in 15 states offer residential rates lower than the averages for all utilities in those states.

A comparison of 1997 rates by the National Rural Electric Cooperative Association finds that another 24 states have rates that are just 1 to 10 percent higher than the utilities' state averages.

Sales prices for power generation assets in the United States during the past two years have climbed to unprecedented levels. This trend should continue. More than 20,000 megawatts of generation assets have been sold, with another 20,000 MW announced. During the next five years, it is expected that 70,000 to 140,000 MW will change hands. We have seen only the beginning of a massive redistribution of generation assets - from regulated utilities to unregulated marketers and plant operators.

In fact, the prices we've seen for generation assets may turn out to be bargains.

Will inaction in the Senate and House prompt FERC to move ahead?

About 36 bills with the word "electric" in them were introduced in the 105th Congress. According to Capitol Hill and industry association staff, the 106th Congress, officially begun Jan. 6, appears likely to see fewer restructuring bills, but steadfast champions.

Likelier still are developments outside of Congress that will shape energy policy and perhaps beat legislators to the punch.

Public power is competitive power, and that keeps IOUs on their toes.

There they go again. You know who I mean, the critics who fear us in a competitive electric utility environment, or who oppose, for ideological reasons, government involvement in the power business.

Charles E. Bayless, in his article "Time's Up for Public Power" (Public Utilities Fortnightly, July 1, 1998), offered up just the latest of these below-the-belt blows.

It's tempting to respond in kind to these critics. Why? Because they torture the facts and distort the record.

Business Wire

William Catacosinos has resigned as chairman of MarketSpan Corp., the utility formed to replace the troubled Long Island Lighting Co. Catacosinos is under investigation by the New York attorney general due to a $42-million severance payment as part of the buyout of LILCO by the New York government-run Long Island Power Authority (see Public Utilities Fortnightly, August 1998, p.28).

SCT Utility Systems Inc., signed a software and services agreement worth about $13 million with the city of Seattle for the BANNER Customer Management System.

ELECTRIC UTILITIES THE WORLD OVER ARE BEGINNING to draw upon the power of Internet. But U.S. investor-owned utilities clearly are the most receptive to using the technology for a variety of applications when compared with their smaller domestic or international peers.

According to a Newton-Evans Research Co. poll of 79 sites around the world, more than half of all information systems officials at utilities planned to use or are using the Internet for customer communications. About 100 percent of U.S.

THE PRICING TURMOIL THAT STRUCK MIDWEST POWER markets during the week of June 22, with allegations of price gouging and calls for a wholesale price cap imposed by the Federal Energy Regulatory Commission (see Docket EL98-53), made for good copy but has obscured what's really going on.

"In the pleadings to FERC, I saw no evidence of price gouging," says attorney Jeffrey Watkiss, who represents power marketers who have asked the Commission for wholesale market reform.