THE NEW S 1 N Foe U S

ous consideration to doing awaywith the popular loan programand that it would make little dif­ference in savings to the U.S. Trea-

.sury. Even with low-interest fi­nancing, co-ops generally havehigher rates than their competi­tors, he said; and if they had to goto the open market for financing,that disparity would be evengreater.

Every Republican administra­tion since Eisenhower has tried todo in REA, he said; but in recentyears the only bill sponsors the ad­ministration has been able to en­list to this end have been fromsuch bastions of rural America asSouthern California and NewYork.

Nongenerators Can't Swim inthe Pool

Western SystemsPower Pool May NotGeta Full Two-YearExtension

The Federal Energy RegulatoryCommission at its April 12 meetingseemed inclined to extend the West­ern Systems Power Pool an addi­tional year, until April 30, 1990, butnot for a full two years as Poolmembers had requested. The bulkpower market experiment involv­ing 24 western utilities is slated toend April 30,1989. Staff apparentlyfelt that a full two-year extensionwas not needed because sufficient .evaluation data could be gathered

4

after a one-year extension, and theyreportedly were concerned aboutextending the high price ceilings al­lowed under the experiment anylonger than necessary.

Commissioner CharlesTrabandt said the one-year exten­sion concerned him because itcould create a "gap" between thetime the experiment ends and thetime the consultant's final evalua­tion report is filed. Trabandt ques-

tioned the wisdom of shuttingdown the Pool and then having toreauthorize it to start back upagain if the evaluation demon­strates that continued operationwould be beneficial. Commis­sioner Charles Stalon also ex­pressed concern about the gap,and the discussion touched on thepossibility of extending the Poolfor 18 months instead of a year,and of requiring the consultant'sreport by a certain date. (See TireElectridty [oumal, December 1988,for discussion of a consultant'spreliminary evaluation ofWSPP.)

One thing the commissionersdid agree on in their discussion ofa draft order was that the basicrules of the game should not be

changed at this time, thus destroy­ing the aspirations of non-utilitygenerators to get into the Pool.Hadson Electric, an lPP developerbased in Washington, D.C., had in­tervened to ask FERC to openPool membership to non-genera­tors for the duration of its ex­tended life. John Clements, man­ager of regulatory affairs forHadson, says his company, a sub­sidiary of Hadson Corporation ofOklahoma, believes it would beconsistent with the purpose of theWSPP experiment to allow non­utility generators to participate be­cause it would increase the num­ber of eligible sellers andultimately result in more eco­nomic benefits for all members.Hadson is affiliated with Ultra­systems Development Corpora­tion, a QF developer with 14plants in Maine, California andVirginia. Ultrasystems offices arein Irvine, California and Fairfax,Virginia.

Clements says, "if the time be­comes ripe" his company, whichwas formed last year, would liketo purchase and resell electricityin a manner similar to what PGXof Portland is doing. Hadsonwants to see a freer market in elec­tricity, according to Clements, andaims to foster this goal through its"regulatory legislative" functionsfor Ultrasystems in Washington,D.C.

Citizens Power & Light of Bos­ton, a new independent powermarketing company formed lastsummer, also intervened in theWSPP case, seeking to become amember of the Pool. CP&L Presi-

TheElectridty ]ournnl

THE ' NEW 5 1 N Foe U 5

FERChastoldHadson Electric, CitizensPower& Light, andsimilar outsiders that theycan't participate ill WSPPat thistime.

dent Larry Kellerman comments,"if PERC really wants to facilitatea maximally competitive market,nongenerators should be able toplay in this ball game." CP&L is asubsidiary of Citizens Energy, anonprofit corporation begun in1979 by Joseph Kennedy II. (See

related article at page 7 of thisissue for more on PGX and Citi­zens Power & Light.)

Southern California Edison andPacific Gas & Electric opposedgranting membership to non-gen­erators. Wes Granger, power con­tracts consultant for Edison, ex­plains that the experiment wasdesigned for utilities with genera­tion and transmission to see howthey could use that generationand transmission most efficientlyto generate power at the least costin the western United States. Enti­ties like Hadson "with no utilityresponsibilities don't contributeanything to the experiment," he

asserts.The commissioners are appar­

ently again going to ignore theAmerican Public PowerAssociation's suggestion (alsomade when the Pool was first ap­proved) that the terms during theexperiment's last year be modi­fied to require guaranteed openaccess to transmission at cost­based rates. Such a restructuringwould allow a useful comparisonbetween the results under the ear­lier years and the final year, ac­cording to APPA Assistant Direc­tor Alan Richardson.

Turlock Irrigation District inter­vened in the case in favor of exten­sion because it has an interest inbecoming a member of the Pooland desires to stay abreast of anyproposed changes in membershipstructure. Turlock's interconnec­tion agreement reached with Pa­cific Gas & Electric last year (seethe November 1988 [ournal) now

enables Turlock to make its debutin the bulk power market arena,and sources say Turlock willlikely be granted membership inthe Pool for however long its ex­tended life turns out to be.

-s-Susan L Whittingtoll

PSNH Bankruptcy

New Hampshire Is onReady Alert for aRegulatory End-Run

The state of New Hampshirewould have "no alternative" but totakeover the assets of Public Serv­ice Company of New Hampshire ifthe bankrupt utility attempts to by­pass state regulation and reorganizeinto separate distribution and gener­ation companies without PUC ap­proval. Larry Smukler, a senior as­sistant attorney general whorepresents New Hampshire inPSNH's federal bankruptcy pro­ceeding, said the state's "overridingconcern is that there be compliancewith the state regulatory process."

PSNH filed a plan December 27with the bankruptcy court seek­ing authority to split off its distrib­uting from its generating busi-

, ness. The FERC-regulatedgeneration subsidiary would pre­sumably take over the utility's355% share of the Seabrook nu­clear plant, an investment whichhas a strangle-hold on thecompany's finances. The NewHampshire PUC must approveany transfer of assets or sale of se­curities, Smukler said, and stateofficials are more than a little con-

May 1989 5