Order 888

Salt River Project (SRP) says it may ask the Federal Energy Regulatory Commission (FERC) to resolve a dispute with El Paso Electric Co.

Illinois has yet to face the issue, but when it does, it may find the road blocked by jurisdictional rules at the FERC. According to estimates by Moody's Investor Service, the state of Illinois would face stranded costs of nearly $6 billion if it should mandate retail wheeling to allow the state's electric utility customers to choose their own supply of electricity.

Talk runs gamut from "rocket docket" to "Just go slow." A merger announcement kickstarted NARUC's annual conference last year. This year, in San Francisco, there was little difference in conference chatter. Only this time, MCI Communications Corp. and British Telecommunications Plc were the suitors, in a $20 billion corporate marriage.

Regulators had better get used to the "M" word, noted speaker John E. Hayes, Jr., chairman of Western Resources Corp.

Incumbent monopolists won't command high premiums

if newcomers can rebuild capacity from scratch at a cheaper price.

At first glance, many of the nation's regional markets for wholesale electric generation appear monopolistic. In some of the 18 regional power markets we have identified, the leading companies account for 75 to 90 percent of the area's generating assets. In other markets, where the concentration problem does not yet seem as pressing, mergers and acquisitions threaten to raise levels of concentration of ownership in generation.

How the electric industry uses DSM and IRP to build load, ignoring basic truths found in fuel-cycle analysis.It was during the early 19th century that General von Clausewitz announced his nine principles of warfare.

Stranded-

Cost

Recovery: All FERC'ed Up

By Michael T. Maloney, Robert E.

McCormick, and Chad A. McGowan

The "lost-revenues" approach in Order 888 ignores the fact that cash flow drives

asset valuation . . .

. . . the key to measuring uneconomic investment.

One thing that adds some fun to my job (notice, I did not say that my job is fun) is the chance to compare similarities between the gas and electric markets.

By Robert J. Michaels

The Justice Department's Guidelines don't tell us very much about

today's (or tomorrow's) electric market.

However many electric utilities remain after this merger wave, competition will be forever changed.

Monopoly rents? Not in the short run. The real enemy is a price war, fueled by indifference to stranded costs. And when that happens, antitrust laws won't offer much help.Competition has formally begun in the electric service industry. The Federal Energy Regulatory Commission (FERC) has issued Order 888, giving generators access to wholesale loads throughout the nation.

The Federal Energy Regulatory Commission (FERC) has issued two orders that indicate for the first time how it would implement the prohibition against "sham" transactions under the Energy Policy Act. The separate decisions involve requests by two municipalities for orders requiring utilities to wheel power.

In one order, the FERC denied a request by the City of Palm Springs, CA, for electric transmission service from Southern California Edison (SCE) under sections 211 and 212 of the Federal Power Act (FPA) (Docket No. TX96-7-000).