New Jersey

WITH DIRECT ACCESS SCHEDULED TO BEGIN ON Jan. 1, 1998, California regulators are moving quickly to set up their long-considered policies on electric restructuring. The restructuring actions touch nearly every aspect of electric regulation in the state from financing decisions and rate design to the sale of generating assets and monitoring new capital additions.

In addition, restructuring has affected ongoing regulatory activities such as the development of performance-based rate making plans and pricing and rate designs for large incumbent utilities.

PITTSBURGH CHALLENGES MERGER; ALLEGES COLLUSION

The city of Pittsburgh has filed an antitrust lawsuit against Allegheny Power Systems Inc., and Duquesne Light Co., to stop the merger proposed by the two companies.

In its Sept. 29 court filing, Pittsburgh claimed the two utilities acted jointly to restrain trade. The city said the companies did this by agreeing to maintain higher rates for electric retail service at two industrial sites targeted for redevelopment zones pending their merger.

AS U.S. ELECTRICITY MARKETS BECOME increasingly competitive, large industrial customers will discover many new choices. These choices include the opportunity to modify the amount and timing of electricity use in response to prices that vary from hour to hour. In addition, customers can sell certain electricity services, including operating reserves and load following, to the system operator. And industrial customers with cogeneration facilities can participate fully in bulk power markets, buying and selling energy and ancillary services in response to changes in spot prices.

BY WHAT AUTHORITY CAN STATES FAVOR RENEWABLE

energy in a restructured electricity market?

Renewable resource funding marks a major point of contention in utility deregulation. Environmental groups fear that without some form of compulsion or subsidy, or both, renewable resources will not survive in an energy economy based on least direct consumer cost. However, utilities do not want to be saddled alone with the chore of carrying all renewables to market.

NOx Joke

EPA Proposal Has IOUs Fuming

Electric utilities single-handedly to reduce smog.

MIDWEST AND OHIO VALLEY STATES ARE EXPECTED to get hit hardest by the Environmental Protection Agency's proposal to reduce smog.

Ohio, for example, is home to American Electric Power, one of the biggest contributors of NOx emissions at nearly a half million pounds per year (see chart).

The EPA proposed Oct. 10 that 22 states reduce nitrogen oxide (em a key element of smog (em citing electric utilities as the main source.

Expressing concern about price volatility in the natural gas market, New Jersey, Virginia and Michigan regulators have directed local gas distribution companies to try fixed-price contracts and other hedging instruments. This would allay risk in wholesale gas supply portfolios and protect residential ratepayers from price swings common in the winter heating season, regulators said.

The growing popularity of fixed-price and other financial instruments to hedge against price spikes follows two winters of volatility noticed by regulators nationwide.

New Jersey.

The New Jersey Board of Public Utilities has approved a pilot program for Jersey Central Power and Light Co. that will allow some of the utility's electric customers to choose a private energy supplier and then compare bills with and without retail competition.

JCP&L, an electric utility doing business as GPU Energy, serves more than 11,900 mostly residential customers in Monroe, N.J., the targeted town.

AT Washington Water Power, Bobby Schmidt was appointed director of the company, and Paul A. Redmond announced his retirement as chair and CEO. Redmond started with the company in 1965. Previously, Schmidt worked as an independent trader in Chicago.

MDU Resources Group Inc. has promoted Martin A. White from senior vice president, corporate development to president and CEO. White, who has been with the company since 1991, will replace retiring president H.J. Mellen Jr.

Robert L. Goocher was promoted to president of AGL Resources Service Co. from executive vice president and COO.

With benefits unclear, PUCs will "go slow."

California, New Hampshire, Massachusetts, Nevada, Pennsylvania, Rhode Island, and Vermont have given customers the right to choose their electric providers.

Other states are considering similar legislation.

In Congress, U.S. representatives Schaefer (R-Colo.), Markey (D-Mass.), DeLay (R-Tex.), and U.S. Sen. Bumpers (D-Ark.) and others have slapped bills on the table that would give choice to electric customers on a national scale.