Pacific Enterprises

In two separate cases, the Federal Energy Regulatory Commission for the first time has approved an analytical framework for examining vertical market power concerns raised by convergence mergers of gas and electric companies. This new framework applies when market power in one sector (such as natural gas) threatens competition in another (e.g., electricity).

In the first case, the FERC on June 25 conditionally approved the disposition of jurisdictional facilities in the proposed merger of two holding companies, Enova Corp.

While I read with interest and appreciated your story on electric and natural gas convergence ("Electric/Gas Convergence, Meter to Meter," May 1, 1997, p. 26), I must bring to your attention a misinterpretation concerning the proposed merger of Pacific Enterprises and Enova Corp.

In the second paragraph of your story, you said that Enova "is set to acquire Southern California Gas Co.

Central Vermont Public Service Corp. hired former Electrolux Corp. CFO Douglas D. Sinclair as its marketing and business development v.p. and general manager. In addition to his new position, Sinclair will oversee day-to-day activities at two power generation and technology subsidiaries. Also at CV, Robert G. Clarke, president of Vermont Technical College, and Patrick J. Martin, president of America's Customer Operations at Xerox Corp., were elected to the board of directors.

John F. Cotter, former PECO Energy Co. power trader, was hired by Pennsylvania Power & Light Co.

Dominion Resources touts its "impacted" method, but opponents call it a "stalking horse" (em a scheme to avoid full review at FERC.

Is the Federal Energy Regulatory Commission prepared to accept true marginal-cost pricing for electric transmission?

With all the criticism leveled at the traditional "contract path," one would think that the FERC would consider a new approach to transmission pricing.

In fact, last year in its final Order No.

The Federal Energy Regulatory Commission has approved three orders that together clarify the Commission's jurisdiction over corporate realignments.

The FERC found on April 30, that while it does not have jurisdiction over mergers of public utility holding companies, it does have jurisdiction over transfers of control (dispositions) of public utility facilities.

Corporations will need FERC approval for a merger simply because they own paper assets that qualify as utility property.

In three companion orders issued April 30, 1997, the Federal Energy Regulatory Commission tried to stake out new jurisdictional turf. It attempted to expand its jurisdiction under section 203 of the Federal Power Act to cover "convergent" mergers and reorganizations involving electric utility holding companies and power marketers.

"People are starting to talk about ISOs on the gas side." So says Jerry Pfeffer, lay advisor on energy industries for Skadden, Arps, Meagher & Flom, the New York law firm well known for its work in mergers and acquisitions.

Pfeffer's comment alludes to events now unfolding in Southern California, that fount of fashion, where each round of "deregulation" only doubles the ante in billable hours. This time it's natural gas pipelines. Do they have market power too?

"It Would Not Surprise Me"

Southern California Edison Co. has now alleged that Southern California Gas Co.

A new study takes a look at using the benefits of electric utility deregulation to increase trade and investment between the U.S. and Mexico. Published by the Salt River Project, or SRP, and the Comision Federal de Electricidad, the study aims to help companies understand the legal and regulatory regimes of the two countries and the potential opportunities to buy and sell power across the border via high-voltage interconnections. Others involved with the study included the

U.S. Agency for International Development, Price Waterhouse and Bechtel.

Enova/PE merger finds

California utilities learning

how to "micro-unbundle."

here's a meter war ticking away out West, pitting natural gas against electricity.

Enova Corp. is set to acquire Southern California Gas Co. through a merger with the gas utility's parent company, Pacific Enterprises. This strategy raises a tantalizing question: Can the new, merged company sell electricity "through" SoCalGas meters, using customer contacts on the gas side to grab market share in electricity from Southern California Edison, whose territory overlaps that of SoCalGas?

The Federal Energy Regulatory Commission allowed Ensource, a subsidiary of Pacific Enterprises, to cancel its authorization to engage in power marketing activities at market-based rates.

Intervenors protested that Ensource pursued the cancellation as a tactical maneuver to remove the proposed merger between Pacific Enterprises and Enova from FERC review. They claim that the merger applicants ultimately would resume Ensource's operations and make it part of a post-merger joint venture to market electricity, natural gas and energy-related services at market-based rates.