San Diego Gas & Electric

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.

If truth is the first casualty of war, as we learned from author Mark Krebs ("It's a War Out There: A Gas Man Questions Electric 'Efficiency,'" December 1996, p. 24), then certainly the truth has been mutilated beyond recognition.

His article, which suggests that electric utilities have used conservation and demand-side programs improperly (to build electric load at the expense of natural gas!) is full of inaccuracies, misleading charts and other errors.

One of these days you may see a former chairman of the American Gas Association become the new chair of the Edison Electric Institute. Or maybe the other way around.

I broached this subject the other day when I found myself downtown at EEI headquarters on Pennsylvania Avenue, talking with some association reps.

About a year ago I stuck my neck out to predict that electric utilities might end up with stranded investment in transmission lines. I suggested that financial commodities trading-longs, shorts, and hedges-might supplant physical product movements. It's happened in natural gas, where the interstate pipelines have suffered from "decontracting" and capacity "turnback"-a phenomenon that has tended to move from West to East.

Despite a recent delay, the stage

appears set for online trading

in electric transmission capacity.

THIS IS ONLY A TEST (EM FOR NOW.

But come January, if all goes well, the OASIS program will start up in real time, with customers venturing onto the Internet to place reservations for capacity on the nation's electric transmission grid.

The California Public Utilities Commission (CPUC) has approved loan guarantees of up to $250 million to fund development of computer hardware and software to help the electric industry establish the independent system operator (ISO) and the Power Exchange (PX), both key components of the CPUC's proposed restructuring plan.

Pacific Gas & Electric Co. and Southern California Edison Co. each had asked for $112.5 million in loan guarantees; San Diego Gas & Electric Co. had asked for $25 million.

The California Public Utilities Commission (CPUC) has approved a proposal by San Diego Gas & Electric Co. (SDG&E) to switch to an automatic adjustment mechanism to determine cost of capital (em a move that could save the utility approximately $100,000 per year in regulatory costs.

In a case involving San Diego Gas & Electric Co. (SDG&E), the California Public Utilities Commission (CPUC) has OK'd new guidelines for preapproved contracts designed to obtain, attract, or retain new electric customers. The guidelines also apply to contracts designed to stem self-generation or avoid customer flight out of state.

The CPUC also will allow SDG&E to negotiate a rate discount contract with any customer, for any purpose, as long as shareholders absorb 100 percent of revenue losses and rates reflect a price floor based on customer-specific marginal cost.

The old shibboleth to some extent is literally true. The electric industry appears different from the natural gas industry in that demand must be matched immediately with production. No viable location comes to mind to put away some of that extra power until it is needed. But literal truth is not necessarily the whole story.

While the cost of common household goods like bread and milk increased 77 and 50 percent, respectively, from 1985 to 1995, the average residential electricity bill for customers of San Diego Gas & Electric Co. (SDG&E) dropped 13.6 percent over the same period, according to San Diego Chamber of Commerce statistics.

That trend shows no sign of abating. In fact, low rates are fast becoming a staple for the utility's 1.2 million electric customers.