Strategy

STATE PUCS

Distributed Generation. In December and January the Illinois commission took comments from utilities, marketers, manufacturers, and trade and advocacy groups on how to develop policy on distributed generation.

* Rulemaking Strategy. Enron has urged the state to proceed in a fashion similar to the California PUC's

two-track investigation. It asked for two separate rulemakings on (1) interconnection standards for DG installations of 50 megawatts or less, and (2) rate design and operational issues.

* Unit Size Limits.

"Sensible Approach" or Misguided Meddling?

The proposal by Reps. Franks and Meehan to sell federal power at market rates provokes conflicting responses from readers.

I am writing in response to an article written by Reps. Franks and Meehan entitled, "The Sensible Approach: Federal Power at Market Rates," published in the Nov. 1, 1999 edition of Public Utilities Fortnightly (see pp. 44-47). I agree that it is outrageous that electricity services for people in the Northwest are subsidized (regardless of the customers' ability to pay) by the rest of the people in this country.

Britain's top energy suppliers compete on price but offer their own unique benefits and incentives.

In addition to the effects of regulatory reform and policy, certain consumer, environmental and technological shifts in the United Kingdom are effecting significant changes in the manner in which electric and gas companies competing for customers in the mass market. The U.K. residential market was opened to electric retail competition between September 1998 to May 1999. As of September 1999, about 10 percent of all U.K. residential customers had changed electricity suppliers.

But who gets a slice of the pie?

In August the Bonneville Power Administration released its proposed wholesale electric rates for the five-year period from 2002 to 2006. The controversial proposal is subject to five months of scrutiny, including eight public hearings from Sept. 30 through Oct. 14, with adoption of final rates expected early in 2000.

In this era of emerging competitive markets, relatively low-priced federal power is prized by wholesale customers in the BPA's Northwestern U.S. service territory.

Sales prices for power generation assets in the United States during the past two years have climbed to unprecedented levels. This trend should continue. More than 20,000 megawatts of generation assets have been sold, with another 20,000 MW announced. During the next five years, it is expected that 70,000 to 140,000 MW will change hands. We have seen only the beginning of a massive redistribution of generation assets - from regulated utilities to unregulated marketers and plant operators.

In fact, the prices we've seen for generation assets may turn out to be bargains.

A hedging strategy to protect gross margins in a fixed-price mass market.

The retail electricity markets in the United States are set to bloom. Retail power marketers presently must navigate various hurdles, raised by incumbent utilities, before they are able to establish a foothold. Some states, however, including Pennsylvania and Massachusetts, have established a fixed schedule for the recovery of stranded costs, resulting in profit opportunities for new entrants.

September meeting sends draft legislation back to the drawing board.

Reliability is a self-correcting issue (em if we let it slide, something will happen and it will be corrected ¼ [But] do you want the government to do it?"

That was one industry representative speaking of attempts by the North American Electric Reliability Council (known as NERC) to evolve into a self-regulating reliability organization, or SRRO.

With few regrets, a regulator steps down from the PUC, still touting his brand of electric competition.

I'm proud to have been an author of the first chapter of a book still being written.

Today's electric industry is more competitive, more reliable, more efficient, and more dynamic than it was six years ago when I joined the California Public Utilities Commission. However, the future of the industry has not been set. The steps taken over the next several years will determine the outcome of electric competition.

How to survive in a seller's market.

Divesting power plants today may look very much like a seller's market. Buyers may believe they lack the necessary leverage to take an aggressive position on workforce transition.

FERC

GAS PIPELINES. Noting a move toward shorter-term contracts since Order 636, the FERC on July 29 issued an "integrated package" of reform proposals for the natural gas pipeline industry: (1) specific measures in a notice of proposed rulemaking on short-term transportation (transactions shorter than one year); plus (2) an open-ended request for comments in a broader notice of inquiry. RM98-10-000, 84 FERC ¶61,985 [NOPR]; RM98- 12-000, 84FERC ¶61,087 NOI].