THE LAST FEW TIMES I'VE HIT THE ROAD FOR A INDUSTRY conference or speaking engagement, someone invariably has come up to tell me how my picture on this page seems to be getting younger. OK, I confess. Like many other columnists, I've probably carried on too long with the same old photo.
WHY IS ELECTRICITY COMPETITION NOT WORKING? The principal reason is the failure of Order 888 to accommodate the economic and technological constraints of wholesale power markets.
Soon after Congress passed the Energy Policy Act of 1992, to give authority to the Federal Energy Regulatory Commission to compel electric utilities under its jurisdiction to wheel power for others, the FERC correctly recognized that piecemeal wheeling orders wouldn't work well without a tariff. A tariff would make the service quickly available to the user without the need for time-consuming negotiation.
WHEN 42 PUBLIC UTILITY COMMISSIONERS HUDDLED in private recently at the Brown Palace Hotel in Denver to discuss their roles come 2003, they came to a striking conclusion: Someday they might be out of business. Some said it would take five years, others said as long as 10.
"There was quite a bit of discussion and interest in commissions actually formulating what they call an 'exit plan,' by which they meant, in a kind of systematic way ... being prepared to wind back on their regulatory oversight," says Douglas N.
POLITICS WON OVER PURPOSE AS AN EARLY VOTE on a nuclear waste bill in the U.S. Senate was itself laid to waste, apparently victim of a contested Senate seat in the state where spent fuel would be stored.
The June 2 vote would have limited debate on H.R. 1270. By getting a vote count, the leanings of senators on the bill would have been tested. And the way would have been paved for Senate Majority Leader Trent Lott (R-Miss.) to schedule a second, more formal vote on the measure.
TELEPHONE BILLING PRACTICES. Citing the filed-rate doctrine, which bars deviation from published tariffs, a federal appeals court affirmed the dismissal of two class action suits against AT&T Corp. that sought damages for alleged fraud. The suite arose from AT&T's failure to disclose to its residential long-distance telecommunications customers its practice of rounding charges up to the higher full minute.
THE ROAD TO RETAIL COMPETITION IS A LONG ONE. HAVING realized that, utility management has quelled its initial panic and has begun to concentrate on longer-term objectives. For instance, how much market share am I likely to lose during competition's early stages? And what prices can I charge to various customer classes without incurring a loss in market share?
The answer could affect decisions about future load, asset divestiture and competitive strategies.
CROSS THE COUNTRY, CRITICISM RISES FROM INVESTOR-owned utilities as public power agencies are drawn into regional or national markets through power pools and the geographic expansion of power marketing activities. Whether these agencies are seen as federally funded or just indirectly subsidized, the complaints remain the same: tax advantages, no reciprocity, exemptions from regulation.
Who really has power over the power? Do public power agencies enjoy an advantage, as private industry claims?
SET UP in January by the Ontario Minister of Energy, Science and Technology, and led by Ronald J. Daniels, law faculty dean at the University of Toronto, the Market Design Committee issued its first interim report on March 31, presenting recommendations on two issues: (1) governance, operation and regulation of the Independent Market Operator, and (2) principles of market design.
IMO FUNCTIONS. The functions of the IMO were set out in November in the Ontario provincial white paper on electricity sector reform.
THE RUSSIAN FEDERATION WANTS U.S. UTILITIES AND businesses to know investments are welcome and that processes soon will ensure the safety of American ventures there.
Nevertheless, it appears to favor traditional, American-style utility regulation, setting rates of return and limiting profits.
The Federal Energy Commission of the Russian Federation wants to create competition wherever possible, according to Andrey F. Zadernyuk, the first chairman of the year-old commission.
COMPETITIVE transition charges. Wires charges. Securitization payments. Every stranded cost recovery mechanism considered to date requires customers to pay for electric utility stranded costs through direct assessments on monthly bills. These charges will continue for many years after competition is introduced.
There is a real irony here: As we seek to introduce competition into the electric industry, we as regulators are forced to invoke all of the most heavy-handed tools to extract payments from citizens.