OT

On Monday, January 6, the Board of Trustees of the North American Electric Reliability Council (NERC) voted unanimously to require mandatory compliance from its regional and affiliate councils with all reliability "policies" adopted by NERC. Previously, the regional councils (MAPP, ERCOT, ECAR, etc.) were only required to give their "best efforts" to comply.

As the board explains, "Compliance with NERC rules needs to be insured, but peer pressure will not be sufficient."

This new vote stems from "A Call to Action," mailed out on October 28 by Richard J.

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.

Residential Pilot Programs:

Doing,

Dealing?

Customer choice and electric restructuring may appear synonymous to regulators, but for utilities "choice" means "market share."

THERE WERE 19 PILOT PROGRAMS

planned or underway in the United States by the end of November, involving some 500,000 customers in all classes. The goal? To test competition in retail electric markets.

In the residential class, pilots were operating in Illinois, New Hampshire, and New York. Massachusetts expected to roll out its pilot by January 1. Pennsylvania was planning an April startup.

Public Utilities Fortnightly asked eight commissioners about the demands of restructuring and about an issue particular to their state.

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Comments by P.

The Texas PUC has approved a plan creating the nation's first independent system operator (ISO) from the Electric Reliability Council of Texas (ERCOT). The ISO will be governed by an 18-member board, with three members each from IOUs, municipal utilities, electric co-ops and river authorities, transmission-dependent utilities, IPPs, and power marketers.

A key part of the ISO plan is an electronic transmission information network (ETIN), which ensures equal access to transmission system information, such as available transmission capacity, product offerings, and prices.

The Internet doesn't suit companies

that are vulnerable to security or financial risk (em

like electric transmission providers.

THE RUSH IS ON TO SET OASIS IN MOTION.

R.J. Rudden Associates, Inc. (RJRA) estimates U.S. nuclear plant stranded costs at $65.5 billion ($1994) if electric industry restructuring is fully implemented in 1997.

The firm's analysis relied on historic cost and performance data for each facility, and on RJRA projections of regional competitive prices for capacity and energy. RJRA said a slower restructuring would reduce the investment at risk to between $46.3 billion (year 2000) and $23.2 billion (year 2010).

Thermal Energy Storage: Putting

Green Solutions

on SiteBy John E. Flory, Loren W. McCannon, Stan Tory,

Donald L. Geistert, and James PattersonA recent study coordinated by the California Energy Commission shows how stored-cooling applications provide both environmental and competitive benefits in a summer-peaking market.As California prepares for a more competitive electric future, the California Energy Commission (CEC) is taking another look at some key customer technologies.

On May 13, Environmental Protection Agency (EPA) Administrator Carol M. Browner referred the Federal Energy Regulatory Commission's (FERC's) open-access rule, Order 888, to the Council on Environmental Quality (CEQ). In effect, Browner has asked the Clinton Administration to intervene in the restructuring process.

Browner feels that under certain circumstances the open-access rule could lead to future increases in air pollution. She believes these impacts can be minimized through a combination of actions by EPA and states under the Clean Air Act (CAA).

The movement to introduce competition in the electricity industry comes at a time when many utilities are already ailing or underperforming. In fact, since 1990, half of U.S. investor-owned utilities (IOUs) have failed to consistently grow their dividends, or have cut or eliminated them altogether. According to a new study by Resource Data International, U.S. Electric Utility Industry Merger and Acquisitions, 1996, the current trend toward mergers and acquisitions is fueled by a desire to improve shareholder returns.