PJM Interconnection

Developers launch 70,000 MW of new capacity in Texas, PJM and New York state, but how much will get built?

It's so hot down here, it isn't funny," laughed Ken Donohoo, senior transmission systems engineer at the Electric Reliability Council of Texas independent system operator. But no, he wasn't talking about last summer's scorching temperatures.

Instead, Donohoo was referring to some 30,000-plus megawatts of generation capacity proposed to be built in ERCOT between 2001 and 2003.

The Federal Energy Regulatory Commission appointed Bud Earley policy advisor on electric matters. Earley most recently served as director of the electric policy division of the FERC's Office of Economic Policy. The FERC named Bobbie J. McCartney an administrative law judge. She previously served as deputy chief administrative law judge in the Social Security Administration's Office of Hearings and Appeals.

The Bonneville Power Administration named Jeff Stier its new vice president of national relations. Stier joins BPA after 12 years on the staff of Rep.

A line-by-line case study of two high-priced portfolios, comparing fixed, variable and capital costs against forecasts of regional market prices.

A multi-billion-dollar wave of utility divestiture and power plant auctions has taken place during the last 18 months. Table 1 details some of these transactions, including the purchase price on a dollar-per-kilowatt basis and as a multiple of net book value. These measures frequently are cited as indications that buyers paid too much.

State PUCs

Gas Capacity Rights. The New York PSC told retail suppliers that to serve firm retail gas load they must have rights to firm, non-recallable, primary delivery point pipeline capacity for the five winter months, November through March, or else must augment secondary capacity with a standby charge payable to local distribution companies holding primary rights.

Shopping credits, capacity rules and other mistakes from California and PJM.

With retail electric markets opening rapidly, why are so many getting off to a slow start? Why do suppliers abandon some markets and consumers decline to participate in others? The answer may lie in a series of disconnections between wholesale trading patterns and retail opportunities.

Studies & Reports

Year 2000 Readiness. On Jan. 11 the North American Electric Reliability Council (NERC) predicted a minimal effect on electric system operations from Y2K software problems. The Department of Energy, which had asked NERC to run the electric industry assessment, added that 98 percent of U.S.

Some see utilities fixing prices under competition. Really? I'm shocked.

Did you hear the one about the 10,000 percent rate increase? Ask FERC chairman James Hoecker or his colleague, Curt Hébert. They'd be happy to tell you. They don't even need their own joke writers. This story, you see, is absolutely true.

It seems that Virginia Electric & Power Co. wanted to squeeze just a little more profit from its Kerr-Henderson transmission line.

Tales of bad faith, cold feet and price manipulation.

Lollipops"/fn1/ and "loopholes." "Islands" and "peninsulas." Utilities have invented a colorful new lexicon to explain what's happening at power pools and regional transmission groups. Yet the basic issue remains familiar: How to gain a competitive advantage.

State PUCs

Electric Retail Choice. The Arkansas Public Service Commission has issued its final report on electric restructuring, citing a "broad" consensus favoring competition. It predicts immediate benefits for industrial customers, but warns that residential users likely will not see any quick rate cut. The PSC saw competition as consistent with action in neighboring states:

• Oklahoma. State law mandates retail choice by July 1, 2002.

• Mississippi. PSC plan would phase-in competition from 2001 to 2004.

• Missouri.

EL NIÑO HAS STRUCK, WITH NO END IN SIGHT.

Consider that Aquila Energy, the marketing arm of UtiliCorp United, has announced a new financial derivative, known as GuaranteedForecast,sm to hedge the weather against forecasts by the National Weather Service. The new product will pay holders a guaranteed amount if the mercury strays, and Aquila touts its thermometer hedge for any of 170 U.S. cities (em be it Spokane, El Paso, Chicago or New York. Why talk about the weather when you can invest in it, in true '90s fashion?

For this heating season, however, it may be too late.