From the
director…
Welcome
to Pipes & Wires #97. Hopefully everyone had an enjoyable Christmas and New
Year and endured the extremes of heat, cold and wet. Anyway, back into work for
2011 - this issue includes some regulatory decisions in New Zealand and the US,
and then considers some acquisitions in the US and Australia. We then conclude
this issue with some philosophical raving on industry issues and where they
might go in the future.
Accredited supplier status
Utility
Consultants is pleased to announce that it is now an Asia-Pacific Utilities Group (APUG) accredited
supplier (registration number 88899493).
Get Pipes & Wires “white-listed”
To
avoid being intercepted by your server as spam, please arrange to have phil.caffyn@utilityconsultants.co.nz
“white-listed” by your IT people.
Pipes & Wires on the web
Pipes & Wires on Linked In
Pipes
& Wires now has an on-line
group for readers to keep in touch on a more regular basis, bounce ideas
around or raise issues and concerns. Pick here
to visit my Linked In profile and add me
to your connections.
Pipes & Wires on Facebook
Pipes
& Wires now also has its own Facebook page. Just go to Facebook’s home page and search for Pipes
& Wires.
Pipes & Wires on YouTube
To
see a short video clip explaining more about Pipes & Wires, pick here.
Pipes & Wires on the web
To
read more about Pipes & Wires, pick here.
About Utility Consultants
Utility
Consultants Ltd is a management consultancy specialising in pretty much all aspects
of energy and infrastructure networks – pick here to see more, or
to be sent a detailed profile of recent projects, pick
here.
People in power
A
couple of years ago Pipes & Wires featured the life stories of some blokes
born in the late 1800’s who shaped the electric power industry as we now know
it. Researching and writing those articles was a lot of fun, so I’m going to
write a few more (and if anyone wants an electrical pioneer to be researched
and included, pick here
to contact me).
Bernard Cobb builds an electric empire
Birth and early years
Bernard
Capen Cobb was born on 13th August 1870 in Dorchester,
Massachusetts, the son of Sanford and Mary Cobb. Apart from graduating from the
Phillips Academy
in 1891, little is known about his childhood. After Phillips he then entered
the railroad business (which was 1 of several sectors rapidly consolidating
under the auspices of the investment bankers) for a few years.
The move from railroads to gas to
electricity
Around
1895 Cobb left the railroad industry and joined the Grand
Rapids Gas Light Company as a construction official. Cobb stayed in Grand
Rapids until around 1900 and then moved to New York City and got involved in
the construction, operating and financing of electric utilities for about 15
years.
Building the electric empire
In
the early 1920’s, Cobb then got involved with the brothers-in-law Wall St bankers
Alfred Loomis and
Landon Thorne where they began to consolidate individual
utilities. By 1929 they had consolidated 165 separate utilities into the
giant Commonwealth & Southern Corporation, and it is here that this story
becomes inter-twined with some other Pipes & Wires stories.
After
consolidating C&S, Cobb persuaded an up-and-coming young utilities lawyer
from Akron, Ohio, Wendell
L. Willkie, to join C&S as senior legal counsel at the unheard of
salary of $36,000 per year. Meanwhile, Cobb had promoted Alabama Power
president Thomas
W. Martin to president of C&S while Cobb assumed the chairman’s role.
However in 1932, Cobb moved Martin back to the Alabama Power presidency and assumed
the dual role of both chairman and president of C&S while he searched for a
successor. In late 1932 Cobb’s health declined and he began steering Willkie
into greater responsibilities until 24th January 1933 when Willkie
was formally appointed to the president’s role (with a further jump in salary
to $75,000 per year).
The industry going’s on at the time
The
predominant view of history is that the consolidation of electric utilities in
the 1920’s was full of chicanery and tricks like
pyramids, non-voting stocks, and interlocking shareholdings etc. Vilified names
like Sam Insull would
no doubt be prominent, and many would hold the view that the industry (or at
least the industry’s bankers) deserved the full wrath of the Roosevelt administration
which culminated in the Public Utility
Holding Companies Act 1935.
It
appears, however, that Cobb (and presumably Thorne and Loomis) were remarkably
honest and transparent in their approach to consolidation, taking the view that
consolidation would provide improved better service and lower prices. Perhaps
their honesty has been overlooked in history’s rush to harshly judge the empire
builders of the 1920’s.
Cobb’s later years
At
the age of 64, Cobb’s health appears to have progressively worsened until June
1934 when he retired as chairman and withdrew from all involvement in C&S. For
all Cobb’s ill health in his mid-sixties, he lived many more years, passing
away at the age of 87 at his summer house in Altamont, New York on 30th
September 1957.
Regulatory decisions
NZ – update on regulating the national
grid
Introduction
Pipes
& Wires #90 examined the Commerce
Commission’s recommendation to the Minister Of Energy
that Transpower should be subject to
Individual Price-Quality regulation (as described in s53ZC
of the Act) because that instrument is more likely to promote the s52A
Purpose Statement than Default Price-Quality regulation or Customised
Price-Quality regulation. This article briefly examines the on-going progress
of developing the IPQ instrument.
Background
Transpower
is currently operating under an administrative settlement with the Commerce
Commission (refer Pipes
& Wires #72) which expires on the 30th June 2011. This
administrative settlement was reached in May 2008 in respect of thresholds
established under Part 4A of the Commerce Act 1986, and although Part 4A has
been repealed, the settlement remains in force. The passage of the Commerce
Amendment Act 2008 (which amended the Commerce
Act 1986) introduced a range of new regulatory instruments and also
established several statutory procedures that the Commission must follow.
Recommendation to the Minister Of Energy
Back
in April 2010, the Commission published its’ Recommendation
to the Minister, which was that Transpower should be subject to Individual
Price-Quality regulation. The Commission’s reasons were broadly....
·
A Default Price Path (DPP) has
statutory constraints on its’ analytical features, making it difficult to
accommodate what is expected to be a very lumpy and (at this stage) uncertain
CapEx profile.
·
A Customised Price Path (CPP) includes
statutory timeframes that would be difficult to meet due to Transpower’s lumpy
and uncertain CapEx profile.
·
An Individual Price Path (IPP) has less
statutory constraints around timeframe for analysis, can be rolled over at the
end of the IPP (unlike a CPP), can include targeted incentive mechanisms, and
can include a wash-up to address under- or over-recovery (which a DPP cannot
do).
Next steps
Following
the Minister’s approval of IPP as the preferred regulatory instrument, the
Commission has steadily worked on developing and consulting on the detail of
the IPP. Pipes & Wires will examine the detail of the IPP when it emerges
(probably sometime around March or April 2011).
US – state regulator recommends rejecting
PATH
Introduction
Pipes
& Wires #80 introduced the Potomac Appalachian Transmission
Highline (PATH), although in an entirely different context. This article revisits
the PATH in the context of the West
Virginia Public Service Commission’s (PSC) view that the PATH’s application
should be rejected.
What exactly is PATH
?
The
PATH is a 275 mile long 765kV line from the John E. Amos power
station near Charleston, West Virginia to Kemptown Substation near
Newmarket, Maryland being promoted by American
Electric Power and Allegheny
Energy (just for clarification, the West Virginia PSC documents refer to
224 miles, which is the PATH length through West Virginia, not the total length
of 275 miles). The PATH is expected to cost about $2.1b.
The need for PATH
The existing West
Virginia and Maryland power grids are aging and becoming increasingly capacity
constrained. The promoters claim that PATH will be need by 2015 to meet
projected demand on the East Coast, a view supported by the DOE, the NERC,
and the PJM.
Key events in the PATH approval process
PATH’s approval
has included the following key events....
·
15th May 2009 - PATH filed an
application with the West Virginia PSC to build a 765kV line.
·
28th October 2009 – the PSC staff
recommended that the Commission either dismiss the application or require PATH
to request a tolling. The basis for this recommendation was that the Maryland PSC had dismissed
the application and that the load and economic data was out of date.
·
4th November 2009 – PATH objects to the
dismissal but agrees to a tolling.
·
24th November 2009 – the Commission
denies the motion to dismiss but agrees to a tolling.
·
3rd May 2010 – PATH proposed to toll the
statutory date from 24th February 2011 to 16th May 2011.
·
3rd June 2010 – the Commission grants
PATH’s request to toll the statutory date.
·
8th July 2010 – PATH submitted update
information including alternative options.
·
10th August 2010 – PATH filed a 3rd
proposal to toll the statutory deadline, citing the need to correct an error in
their base-case modeling.
·
10th September 2010 – the Commission
granted the 3rd motion to toll and set a new timeframe that required
the PSC to make a final decision by 28th July 2011.
·
12th October 2010 – the Virginia
Electric & Power Company (VEPCO) sought a ruling that the rebuild of
its Mount Storm – Doubs 500kV line be exempt from various parts of the West
Virginia Code because of the urgent nature of the work. This rebuild was
approved by the PJM.
·
10th December 2010 - the PSC’s staff recommended
to the Commissioners that the PATH application either be dismissed or that
PATH be required to request a tolling sufficient to
allow the PSC to undertake further analysis.
·
6th January 2011 – AEP and Allegheny
request the Virginia State Corporation Commission to delay its planned decision
so that updated demand projections can be included in the proposal.
·
7th January 2011 – the West Virginia PSC
postponed its’ postponed its deadline for ruling until 9th February
2012 in response to the above request.
Basis of the PSC’s recommendation to
reject
As
part of PATH’s initial application, rebuilding the Mount Storm – Doubs line was
recognised as an alternative option. However VEPCO’s filing of 12th
October 2010 makes that rebuild a certainty and, in the view of the PSC staff,
erodes the urgency for PATH. The PSC staff go on to note that the proposed Mid-Atlantic
Power Pathway (MAPP) in conjunction with the Mount Storm – Doubs rebuild
would eliminate the reactive power excursions used to justify PATH until 2019,
and that a significant re-analysis will be necessary.
Pipes
& Wires will re-visit the PATH’s tortured path as further filings and
decisions occur.
Energy policy
US – more on smart meters in California
Introduction
Pipes
& Wires has closely examined smart metering in Maryland and California
(refer Pipes
& Wires #92, #93,
and #94)
and identified what appears to be some significant disconnects within the whole
roll-out process. This article briefly examines the supposed health effects of
smart meters, but then progresses to a more philosophical analysis of the wider
issues.
Background
Just like wind farms, smart meters held the
promise of being the next “game changer”. While the advanced features of smart
meters will undoubtedly contribute to reduced energy consumption, demand
management and better capital asset utilisation, some serious disconnects
between communities, policy makers and regulators have arisen. Just 2 examples
of such disconnects are...
·
In
Maryland, where the Public
Service Commission suddenly rejected Baltimore
Gas & Electric’s smart metering program on the basis that the much
proclaimed benefits of smart meters are now “largely indirect, highly contingent and a long way off”.
·
In
California, where a political storm erupted over Pacific
Gas & Electric’s smart meter roll out which was sold to the community
on the presumption that electric bills would drop, but in fact increased due to
the coincidence with the hot summer.
I’m sure we’ve all got further examples of
our own that contribute to the view that significant 3-way disconnects between
policy makers, regulators and communities are emerging.
The
specific issue in California (this time)
Most smart meters use a cut-down mobile
phone to transmit consumption data to the electric company’s offices every
half-hour (at least that’s what the smart meter that was recently installed at
my house does). It appears that it is this “chirp” of mobile phone signal that
has raised the concerns of the advocacy group EMF Safety Network, which
proposed a moratorium on Pacific Gas & Electric’s smart meter roll-out. By
a vote of 4 to 1, the California Public
Utilities Commission rejected EMF’s proposed moratorium.
Global
– where are the trends leading us ?
Introduction
A few recent Pipes & Wires articles on
smart metering, feed-in tariffs and renewable generation are suggesting trends
that seem a bit confused and disconnected up close. This philosophical rave
from the Editor’s desk will hopefully provide a framework within which these
issues make a bit more sense.
The
wider issues
Moving away from the specific issues, there
are a couple of wider trends that need to be considered....
·
Policy
formation in many jurisdictions has become isolated and remote from localised, real-world
concerns. In many cases this is being driven by single-issue thinking that has many
of the hallmarks of an ideological crusade.
·
Communities
are increasingly being told what is good for them and that they must “do their
bit to save the planet”. Not surprisingly, many of these communities are
pushing back very hard and in what seems an increasing
number of cases are successfully opposing renewable initiatives with the added
irony that the very legislation designed to promote environmental protection also
provides seemingly unending avenues for objecting and appealing.
·
Regulators
... well ... my thinking is still a bit fuzzy there. However it seems to be
caught in a widening gulf between renewables and smart metering being
worthwhile on the one hand, but why should customers have to fund them on the
other hand ?
So where might all this lead ?
I’ll
be very specific here - small scale renewable generation supported by
electronic and communication technologies will happen. It has been
happening around the fringes of the energy sector for many years, and it will
eventually become mainstream.
For
those who’ve read Alvin Toffler’s
books (Third Wave, Future Shock
and Power Shift), I’m going to slip into a mode of thinking dominated by
what Toffler refers to “second wave” (industrial-based economy) and “third
wave” (knowledge-based economy). Industrial-based economies have been on the
decline in most Western nations for about 55-odd years, and with that decline
has gone a transition from centralised, consolidated manufacturing that
required concentrated energy (first coal, then electricity) and synchronised
communities of people acting in unison (to work in the factories that used that
concentrated energy). This “demassification” and “desynchronisation” as Toffler
refers to them as lends itself to small scale, localised energy production that
is knowledge (technology) intensive. So perhaps a couple of concluding remarks
to ponder...
·
The shift from manufacturing to
knowledge in the West lends itself to small scale, localised generation
supported by high technology that doesn’t necessarily need reliable bulk
electricity supplies (and in saying that I recognise that web hosts require
even more reliability, but that can be achieved by a diverse portfolio of
energy supply).
·
Small scale generation technologies are
becoming cheaper all the time. This lends itself to such technologies becoming
financially viable in their own right, rather than relying on subsidies or
“punishing second-wave energy sources” with various levies or taxes. As
second-wave energy sources become more expensive in their own right, the need
to load them down with levies and taxes also declines.
·
The “demassification” and
“desynchronisation” of work (and consequently travel) patterns may well “smear”
the well established daily demand peaks that have characterised electricity
supply for the last 120 years as people work at different times, travel at
different times and indeed, don’t travel at all.
·
The specifics of battery technology and
electric motor controls is likely to further advance electric cars (to the
point where they will be able to stand on their own merits, rather than rely on
subsidies and punishment of petrol cars). As people become “demassified” and
“desynchronised” their travel needs may decline to the point where a
conventional petrol car is no longer necessary. Probably the major outstanding
issue here is the need for some policy makers and regulators to reach a
sensible understanding that electric cars are only green if they are recharged
using renewable electricity.
·
Have large wind farms had their day already ? The way of the future seems to be small, localised
renewable generation, so are large wind farms simply third wave “technologies”
dressed in second wave “clothing” ie. 1 foot still firmly in the “massifed”,
“synchronised” second-wave world ? The fact that wind
turbines, and indeed wind farms, seem to be getting bigger and requiring more
and more transmission lines suggests a failure to fully understand these second
and third waves.
·
Regulatory thinking will probably
require a significant overhaul. In many cases, regulators are saying at least
some third-wave things, but when it comes to approving third-wave initiatives
(such as Baltimore
Gas & Electric’s proposed smart meter roll-out) they seem to regress to
using second-wave tools to assess third-wave ideas. Not surprisingly, the
answer is often wrong.
Mergers & acquisitions
Global – the emerging trends
Recent events
The
last couple of Pipes & Wires have featured several M&A articles on US
utilities that suggest an exit of European utilities which in turn provides the
opportunity for US utilities to consolidate (and yes, it has been noted that Electricité de France is bucking the trend by
acquiring Constellation
Energy). Recent events that seem to fit this trend include....
·
E.On
sells Kentucky Utilities and LG&E
(which PPL acquires).
·
Northeast
makes a bid for NStar.
·
FirstEnergy acquires Allegheny Energy.
·
Electricite de France acquires
Constellation Energy (and in parallel sells its UK wires business EDF Energy).
·
RWE
divests its stakes in American Water.
·
Iberdrola
migrates its’ capital from gas distribution to electricity transmission in the
US.
·
National Grid sells its electricity
and gas businesses in New Hampshire.
The trends
Over
the years Pipes & Wires has identified the following “waves” of global
investment....
·
A reasonably distinct pattern of
European (and subsequently US) investment in Argentina following their
privatisation program.
·
A reasonably distinct pattern of US
investment in the UK and the Australian state of Victoria.
·
An overlay of several patterns of US
utilities exiting the UK and Victoria, closely followed by European utilities
entering the UK and Asian utilities investing in Victoria.
·
A reasonably distinct extension of the
previous European investment in the UK to include the US.
·
A reasonably distinct pattern of
(western) European investment into eastern Europe as
partial-privatisations occur in the former Communist block nations.
·
A reasonably distinct interest of
Middle East sovereign wealth funds.
·
A reasonably distinct extension of the
previous Asian investment in Victoria to include the UK as the gas networks
were sold off and the European utilities start to exit.
The
latest waves to add to the above list include....
·
An emerging pattern of European exit
from the US, with the seemingly anomaly of EDF investing in the US.
·
Neighboring US utilities
consolidating.
US – Iberdrola sells gas businesses to
fund electricity
Introduction
It’s
been a while since we looked at Iberdrola
... 2 years ago they completed their acquisition of Energy East, and then were the subject of
a bid from Electricité de France. This article
examines Iberdrola’s recent sale of 3 gas distribution businesses to finance
major electricity transmission upgrades in and around the New England states.
The deals
The
3 gas distributors sold by Iberdrola back in May 2010 are....
·
Connecticut
Natural Gas Corporation.
·
Southern
Connecticut Gas Company.
These
3 companies collectively supply 369,000 customers in Connecticut and
Massachusetts, and were sold to UIL
Holdings for $1.25b.
Spending the proceeds of the deal
Iberdrola
plans to use the sale proceeds to fund $1.4b of transmission investments
including...
·
New 115kV lines and substation near
Ithaca, New York.
·
A new 115kV line and 2 substations near
Corning.
·
A new 345kV line, 5 new 345kV
substations and several new 115kV lines and substations throughout central
Maine (the Maine
Power Reliability Program).
·
A smart grid project (partly funded by
the Department Of Energy).
The strategy
Iberdrola
has fairly obviously migrated its capital from gas distribution to electricity
transmission, but the deeper question is why ? Does it
represent a simple narrowing of scope to focus on electricity, is it in
response to a tightening gas regulatory regime, is it a rush to capture renewable
subsidies, or what ? A bit of a read around a few news
articles suggests some of the following elements....
·
A need to renew rapidly aging lines and
substations.
·
A probable attempt to capture subsidies
for smart metering and smart grid initiatives that can be used to drive new
revenue streams and optimise future growth and renewal CapEx.
·
A need to build a solid ring-main to
both support Iberdrola’s wind power ambitions and to support transfer of hydro
power from Canada.
·
A need to achieve a better ROI, which
can be done by migrating capital from state-regulated gas distribution
businesses to FERC-regulated electricity transmission businesses that are
allowed a higher return.
Aus – selling the NSW retail businesses
Introduction
Pipes
& Wires first examined the possible sale of the state-owned electricity
retailing businesses in the Australian state of New South Wales in June 2005 (Pipes
& Wires #41). The issue then expanded to consider the privatisation of
the generators (to fund the Sydney urban rail, if I remember rightly) however
political opposition gazzumped it. This article examines the sale of the
state’s electricity retail businesses and power-purchase contracts by TRUenergy and Origin Energy respectively.
Details of the TRUenergy deal
Assets
included in the TRUenergy deal are....
·
EnergyAustralia’s
retail business (1,500,000 customers buying 21,000 GWh of electricity and also
9,000 GJ of gas per year).
·
Electricity supply contracts associated
with DELTA Electricity’s 2 Western stations
(the 1,400 MW Mount
Piper and 1,000 MW Wallerawang
coal-fired stations).
·
Two power station development sites at
Marulan and 1 development site at Mount Piper.
The
agreed price was $2.035b (subject to final adjustments), and the deal is
expected to be completed by 1st March 2011.
Details of the Origin Energy deal
Assets
included in the Origin deal are....
·
Integral
Energy and Country Energy’s
retail businesses (1,600,000 electricity customers).
·
Electricity supply contracts associated
with Eraring Energy’s 2,640 MW Eraring coal-fired station.
The
agreed price was $3.25b, with the deal expected to be completed by 1st
March 2011.
AGL’s response
Australian Gas Light (AGL) missed out by
declining to pay what it considers high prices, and has already vowed to
capture between 400,000 and 500,000 TRUenergy and Origin customers over the
next 3 years. The prices paid by Origin and TRUenergy are in the order of
$1,300 per customer, whilst AGL notes that its’ costs of capturing other
retailer’s customers is about $150.
Assets remaining to be sold
The
state is still seeking bidders for 2 separate supply contracts, for the DELTA
Electricity coastal stations (Vales
Point and Munmorah)
and the Macquarie Generation stations
respectively.
Re-shaping the industry
These
2 sales have significantly re-shaped and consolidated the NEM. TRUenergy will increase
its’ customer base from 1,260,000 to 2,760,000 customers, whilst Origin will increase
its’ customer base from 3,000,000 to 4,600,000 customers.
The capital markets’ responses
The
capital markets seem to have been somewhat mild in their approval, with Origin
rising 1.78% to close at $17.10 whilst AGL sagged 1% to close at $14.91.
US – National Grid sells New Hampshire
businesses
Introduction
Following
a trend of M&A activity in the US, this article examines the UK’s National Grid’s sale of its’ US
electricity and gas businesses in New Hampshire.
The sale process
National
Grid plans to sell Granite
State Electric and EnergyNorth businesses to Liberty Energy Utilities Co,
which is a subsidiary of Algonquin
Power & Utilities Corp in Ontario, Canada (maybe there’s another wave emerging !!) for $285m. The 2 businesses collectively supply
43,000 electric customers and 83,000 gas customers. The deal is subject to
regulatory approval and is expected to be concluded around September 2011.
To
put things in perspective, National Grid supplies 3,300,000 electric customers
and 3,400,000 gas customers in Massachusetts, New Hampshire, New York and Rhode
Island, so the deal represents only 1.8% of National Grid’s customer numbers.
The strategy behind the sale
Unlike
many deals where the underlying strategy has to be inferred, National Grid’s
strategy is very plain ... the need to boost earnings above the unacceptable
9.54% set by the New Hampshire Public
Utilities Commission to somewhere in the region of 12.25%.
US – progress on FirstEnergy’s bid for
Allegheny
Background
Pipes
& Wires has been following FirstEnergy’s
bid for Allegheny Energy, and
noted in Pipes
& Wires #95 that Allegheny’s shareholders had approved the acquisition.
This brief article notes progress on obtaining the required regulatory
approvals.
Recent progress
By late
January 2011, approvals had been obtained from the FERC, the Department
of Justice and from the Virginia,
West Virginia, Maryland and Pennsylvania state
regulators. Pipes & Wires will make further comment as the deal proceeds to
completion.
Famous power struggles
The
electrical history of many cities and countries includes bitter struggles
either between public and private interests seeking exclusive rights to
distribute and sell electricity, or between competing private interests. This
historical interest series examines some of those struggles.
Wendell Willkie battles the TVA (part 1
of 2)
Introduction
Long-time
readers may remember an article about Wendell Willkie in Pipes
& Wires #55 (and those who have attended my electricity training courses
will also have endured a video clip of Willkie espousing his views on free
markets). This 1st part of a 2 part article looks not so much at Willkie’s
life and work, but about his specific opposition to the Tennessee Valley Authority (part 2 will examine his
opposition to the Public Utility Holding Company Act 1935).
The predominance of private power
By
the early 1930’s private (investor-owned) utilities dominated the US landscape,
but only in the dense metro areas as these utilities quite correctly identified
that there was little profit to be made in rural areas. By this time Willkie
was a senior lawyer and then subsequently president of Commonwealth &
Southern Corporation which controlled 165 individual utilities stretching
from Maine to Florida. Willkie also assumed the role of mouth-piece for the
private power industry.
The beginnings of the TVA
The
Tennessee Valley had a long history of flooding, and by way of a lengthy and
often controversial process, Senator George W. Norris
of Nebraska (a relentless critic of private power who routinely voted against
his fellow Republicans) advocated the establishment of a federal corporation to
provide inter alia flood control and
electricity generation. President
Roosevelt signed the Tennessee
Valley Authority Act on 18th May 1933, and work soon began on
flood control and power station works.
The battle lines get drawn
The
root of the private power industry’s concern appears to be two-fold....
·
That the TVA would effectively use
taxes paid by the private utilities to compete against those very same private
utilities (which included several of C & S’s operating companies).
·
That the TVA’s unlimited borrowing
capacity at the low interest rates reflecting the strength of the US Government
would lead to unfair competition against utilities that had to borrow at
commercial rates.
Willkie’s
opposition to private power began around 1930 while he was still a rising star
at C & S, however this opposition increased to a fever pitch as Norris’
sponsored the TVA bill. Willkie testified before the House Committee on
Military Affairs that the terms of the power purchase contracts that the TVA
could impose on private utilities effectively made them un-bankable, and that
if the TVA was going to take over private utilities that fair compensation
should be paid.
The TVA wins the day
Despite
Willkie’s strong advocacy, history records that Roosevelt was the man of the
hour, and a largely Democratic Congress supported the TVA Bill which was signed
into law. As noted in Pipes & Wires #55, C&S couldn’t compete with the
TVA and Willkie oversaw the sale of part of C&S to the TVA for $78.6m.
Historical interest
UK – the secret life of the national
grid
BBC
4 recently screened three 1-hour documentaries about the history
of the UK’s national grid (which is a timely follow on from the article
entitled “Battle Of The Currents” in Pipes
& Wires #95). The link to BBC 4 may not work for readers outside of the
UK, so fortunately its’ been broken into smaller segments and uploaded to You
Tube in 15 minute segments as follows (if anyone can find the links to the
segments not underlined that would be really cool)....
·
Episode 2 segment 1 of 4.
·
Episode 3 segment 4 of 4.
A bit of light reading…
Book review – “Switching On The King Country”
Helen Reilly’s latest
book examines electricity in the King Country area of New Zealand’s north
island from the beginnings of electric light in 1911 through to the present era
(2008). In 220 pages jammed packed with stories, anecdotes, interviews,
photo’s, maps and drawings the book chronicles the development of the Waitomo,
Wairere and King Country Electric Power Boards and the Taumarunui, Ohakune and
Raetihi Borough electricity departments and the eventual formation of The Lines Company and King Country Energy. The chapter headings
include....
·
From candlelight to electric light 1911
– 1924.
·
Power in the borough is in short supply
1924 – 1939.
·
Rural communities are eventually
electrified 1939 – 1958.
·
Consolidation and expansion 1959 –
1969.
·
Upgrades, amalgamations and reforms
1970 – 1989.
·
A decade of government reforms and
company development 1989 – 1999.
·
Coming to grips with separation 1999 –
2007.
·
New challenges for rural electricity
companies 2008 -
For
those (like me) that enjoy history this book is a must have. Order yours for
the exceptionally low price of $39.95 (includes NZ postage and packaging) from
the King Country Electric Power Trust by picking here.
Wanted – old electricity history books
If
anyone has an old copy of the following books (or any similar books) they no
longer want I’d be happy to give them a good home…
·
White Diamonds North.
·
Northwards March The
Pylons.
·
Marlborough Will Shine Through.
·
Two Per Mile.
·
Live Lines (the old ESAA journal)
Conferences & training courses
The following
training courses will be run by Conferenz...
·
Offshore
safety & risk management for the oil industry – New Plymouth, 21st
– 22nd February 2011.
·
Marine
drilling for the oil & gas industry – New Plymouth, 23rd –
25th February 2011.
·
Fundamentals
of the NZ electricity industry – Auckland, 4th – 5th
April 2011.
·
Fundamentals
of the NZ electricity industry – Wellington, 4th – 5th
May 2011.
Opt out from Pipes & Wires
Pick
this link
to opt out from Pipes & Wires. Please ensure that you send from the email
address we send Pipes & Wires to.
Disclaimer
These articles
are of a general nature and are not intended as specific legal, consulting or
investment advice, and are correct at the time of writing. In particular Pipes
& Wires may make forward looking or speculative statements, projections or
estimates of such matters as industry structural changes, merger outcomes or
regulatory determinations.
Utility Consultants
Ltd accepts no liability for action or inaction based on the contents of Pipes
& Wires including any loss, damage or exposure to offensive material from
linking to any websites contained herein.