Restructuring

In an effort to ease the pain of deregulation for residentialconsumers, the Georgia Public Service Commission (GPSC) voted 5-0last week to approve an estimated $40 million residential refundplan that would help ease what are sure to be high gas bills thiscoming winter. The commission also voted to approve a newsculptured tariff for distribution charges instead of the currentflat rate by a vote of four-to-one, with Commissioner Robert Bakerdissenting.

In an effort to ease residential consumers’ deregulation growingpains, The Georgia Public Service Commission (GPSC) votedfive-to-none yesterday to approve an estimated $40 millionresidential refund plan, which would help ease what are sure to behigh gas bills this coming winter. The commission also voted toapprove a new sculptured tariff for distribution charges instead ofthe current flat rate by a vote of four-to-one, with CommissionerRobert Baker dissenting.

A principle that was the cornerstone of FERC’s landmark gasrestructuring rule, Order 636, is absent from Order 888 and is atthe root of many of the reliability problems in the bulk powermarket, say industrial power customers and a utility/marketer.

FERC needs to dust off and review its landmark gas restructuringrule, Order 636, to get to the root of many of the reliabilityproblems in the bulk power market, say industrial power customersand a utility/marketer.

California’s leading state legislator for energy issues and thechief architect of its 1996 electricity restructuring law last weekdeclared the state’s electricity market as “not workablycompetitive” and urged that state energy authorities re-establishprice caps at their original levels to mitigate against extremeprice spikes when the weather heats up.

The heat wave and attendant electric and gas price spikes ofearly May have lit a fire under federal legislators, who may haveto answer to consumers this summer and constituents this fall as towhy the nation’s partially deregulated power industry isn’tworking.

In a complete about-face, Dearborn, MI-based CMS Energy Corp.has jettisoned major financial restructuring plans to create atracking stock for its Consumers Energy unit. Low stock marketvaluations of utility companies forced the decision, according tocompany officials, and instead CMS plans to gain $700 million byselling some non-strategic assets and reducing its debt – a planexpected to offer more value to shareholders. The news comes alongwith word that first-quarter earnings were down to 70 cents perdiluted share, compared with 80 cents per diluted share for thesame period in 1999.

Preparing for the advent of electric industry restructuring inNevada and a pending merger with Portland General, Sierra PacificResources’ two Nevada power utilities have begun the process ofselling off nearly a billion dollars of fossil-fuel generationplants in a two phase auction seeking preliminary, nonbinding bidsby next month. Book value collectively is just under $1 billion, aSierra Pacific spokesperson said.

Preparing for the advent of electric industry restructuring inNevada and another pending merger with Portland General, SierraPacific Resources’ two Nevada power utilities have begun theprocess of selling off nearly a billion dollars of fossil-fuelgeneration plants in a two phase auction seeking preliminary,nonbinding bids by next month. Book value collectively is “justunder $1 billion,” a Sierra Pacific spokesperson said.