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Retail competition heats up in florida
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tributions and includes as members the Chamber of Commerce, the Sierra Club and the IBEW. We want to be "a catalyst to get the rest of California to wake up," says Coalition director Bob Hudson. One of the Coalition's mailings targets residential customers of Edison, carrying the message that their rates will go up and environmental impacts worsen as a result of the merger. The Coalition has also asked for an investigation by the state attorney general of utility ads being run in the San Diego area touting the benefits of the merger on the grounds they are misleading. Hudson says the Coalition supports the Rosenthal bill because it codifies principles for CPUC evaluation of mergers. The Coalition is also going to try to get FERC to look into the environmental effects of the consolidation. "FERC's refusal to do an environmental assessment of the merger flies in the face of the President's Clean Air initiative," comments Hudson. He adds that San Diegans
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"dose to the President" will contact the White House and suggests "FERC may be operating under 'old assumptions' about its environmental responsibilities." --Susan L. Whittington
Roving Industrial Loads
Retail Competition Heats Up in Florida A 40 MW industrial load worth millions of dollars annually is on the loose in central Florida and has been spotted edging its way south. Tampa Electric Company (TECO) and Florida Power Corporation (FIK2) have encircled the load near the Hardee County line and both have dispatched attorneys to Tallahassee to argue their claim on reward money before the Florida Public Service Commission. Agrico Chemical, whose Florida phosphate mining operations are headquartered at Mulberry, is the customer at stake in the latest competitive jousting between investor-owned companies in the Sunshine State. Sources say differences in industrial rates among the state's major IOUs are motivating some fancy footwork around electricity meters. Agrico currently powers its mammoth excavators with juice from both TECO and FPC, one at each end of its wide ranging operation. The loaders used to mine phosphate drag three-inch thick power lines as they traverse distances that are now beginning to cross traditional utility service bound-
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aries. As phosphate deposits around Tampa were depleted, Agrico's operations moved further south, making electricity service from a supplier other than TECO, in this case FPC, a viable option. The mining company's dual connection allows it to "flip-flop" utility service, according to Bob Trapp, assistant director of the electric and gas division of the Florida Public Service Commission. Tampa Electric this spring asked for a declaratory statement from the Florida Commission on who should serve the Agrico load. A similar case is also pending which involves IMC, a fertilizer manufacturer, which moved its load from Tampa's service territory three years ago. Tampa Electric is now protesting that move. Both cases are headed for a hearing in November. Agrico officials declined to comment on Tampa's complaint, but both Florida Power and the PSC said FPC's lower industrial rates are at the heart of the matter. Bill Warren, an FPC spokesman, said Agrico was very up-front in requesting service, and FPC was obliged to provide a hookup. FPC currently delivers about 18 MW of service, and Tampa serves about 20 MW of Agrico load. "We've done what we're required to do," Warren said. "We want additional revenue as much as anybody" he acknowledges, adding that FPC is not in the position to direct Agrico's use of the power it receives.
The ElectricityJournal
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Industrial customers are getting more aggressive in their searchfor power supply.
The issue in Tampa Electric's complaint before the PSC is "uneconomic duplication of service," according to Mike Mahone~; a spokesman for Tampa. The utility has made considerable investment in providing service to Agrico and says it cannot recover that investment if the load is diminished or withdrawn. Mahoney contends the difference in industrial rates offered by the two companies has not been significant over time and varies only with situational factors such as swings in the price of oil. For Tampa, the key question is what is appropriate for service to a customer that "is firmly located in our service territory," Mahoney stresses. A rate structure which keeps industrial rates "artificially low" has given FPC the competitive advantage in central Florida, according to the PSC's Trapp. The St. Petersburg company has not been before the PSC for a general rate case in a number of years and relatively fewer plant costs are as-
August/September 1989
signed to industrial customers, he said. On the other hand, Tampa recently added its investment in the Big Bend 4 coal plant to rates. Warren says FPC's management savvy, luck and the company's efforts to "buy time" and forestall major construction with load management techniques and power purchases have played a large role in FPC's favorable competitive position. The company has been able to drop rates while other utilities have been raising them, he points out. FPC's comparatively low industrial rates were also the precipitating factor in an antitrust lawsuit filed by Union Carbide last October and currently pending in federal court. After Florida Power & Light (FP&L) failed to gain Commission approval for a special rate to keep Union Carbide from installing power production facilities at its air separation plant at Mims, Florida, Carbide began coveting the less expensive power enjoyed by its competitors 40 miles
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away. FP&L refused Carbide's request to wheel power from FPC on the basis that the utilities operate according to an approved territorial allocation agreement. Carbide subsequently filed a lawsuit claiming allocation of customers and territories was inherently anticompetitive and violated antitrust laws. Union Carbide spokesman Harvey Cobert said the company is paying FP&L 35% more for power than similar industrial customers pay FPC. The load at Mims is about nine megawatts, and electricity accounts for 70 percent of the production costs at the plant. "Our competitive disadvantage is obvious," Carbide says. Union Carbide has asked the court to order FPC to provide power and order FP&L to provide transmission. Carbide has not specified its request for damages, but believes they are substantial, amounting to millions of dollars, Cobert said. A motion for summary judgment filed by Florida Power & Light Co. is pending before the Tampa court. The Florida Commission has opined that FP&L is correct in refusing to wheel power for Union Carbide because of the state's system of territorial allocation. The PSC has not formally intervened in the federal case but is likely to file an amicus brief maintaining that the issue of territorial allocation is a matter for the Florida legislature, not the federal judiciar~ --Sonya Bruce
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tributions and includes as members the Chamber of Commerce, the Sierra Club and the IBEW. We want to be "a catalyst to get the rest of California to wake up," says Coalition director Bob Hudson. One of the Coalition's mailings targets residential customers of Edison, carrying the message that their rates will go up and environmental impacts worsen as a result of the merger. The Coalition has also asked for an investigation by the state attorney general of utility ads being run in the San Diego area touting the benefits of the merger on the grounds they are misleading. Hudson says the Coalition supports the Rosenthal bill because it codifies principles for CPUC evaluation of mergers. The Coalition is also going to try to get FERC to look into the environmental effects of the consolidation. "FERC's refusal to do an environmental assessment of the merger flies in the face of the President's Clean Air initiative," comments Hudson. He adds that San Diegans
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"dose to the President" will contact the White House and suggests "FERC may be operating under 'old assumptions' about its environmental responsibilities." --Susan L. Whittington
Roving Industrial Loads
Retail Competition Heats Up in Florida A 40 MW industrial load worth millions of dollars annually is on the loose in central Florida and has been spotted edging its way south. Tampa Electric Company (TECO) and Florida Power Corporation (FIK2) have encircled the load near the Hardee County line and both have dispatched attorneys to Tallahassee to argue their claim on reward money before the Florida Public Service Commission. Agrico Chemical, whose Florida phosphate mining operations are headquartered at Mulberry, is the customer at stake in the latest competitive jousting between investor-owned companies in the Sunshine State. Sources say differences in industrial rates among the state's major IOUs are motivating some fancy footwork around electricity meters. Agrico currently powers its mammoth excavators with juice from both TECO and FPC, one at each end of its wide ranging operation. The loaders used to mine phosphate drag three-inch thick power lines as they traverse distances that are now beginning to cross traditional utility service bound-
F
O
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aries. As phosphate deposits around Tampa were depleted, Agrico's operations moved further south, making electricity service from a supplier other than TECO, in this case FPC, a viable option. The mining company's dual connection allows it to "flip-flop" utility service, according to Bob Trapp, assistant director of the electric and gas division of the Florida Public Service Commission. Tampa Electric this spring asked for a declaratory statement from the Florida Commission on who should serve the Agrico load. A similar case is also pending which involves IMC, a fertilizer manufacturer, which moved its load from Tampa's service territory three years ago. Tampa Electric is now protesting that move. Both cases are headed for a hearing in November. Agrico officials declined to comment on Tampa's complaint, but both Florida Power and the PSC said FPC's lower industrial rates are at the heart of the matter. Bill Warren, an FPC spokesman, said Agrico was very up-front in requesting service, and FPC was obliged to provide a hookup. FPC currently delivers about 18 MW of service, and Tampa serves about 20 MW of Agrico load. "We've done what we're required to do," Warren said. "We want additional revenue as much as anybody" he acknowledges, adding that FPC is not in the position to direct Agrico's use of the power it receives.
The ElectricityJournal
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Industrial customers are getting more aggressive in their searchfor power supply.
The issue in Tampa Electric's complaint before the PSC is "uneconomic duplication of service," according to Mike Mahone~; a spokesman for Tampa. The utility has made considerable investment in providing service to Agrico and says it cannot recover that investment if the load is diminished or withdrawn. Mahoney contends the difference in industrial rates offered by the two companies has not been significant over time and varies only with situational factors such as swings in the price of oil. For Tampa, the key question is what is appropriate for service to a customer that "is firmly located in our service territory," Mahoney stresses. A rate structure which keeps industrial rates "artificially low" has given FPC the competitive advantage in central Florida, according to the PSC's Trapp. The St. Petersburg company has not been before the PSC for a general rate case in a number of years and relatively fewer plant costs are as-
August/September 1989
signed to industrial customers, he said. On the other hand, Tampa recently added its investment in the Big Bend 4 coal plant to rates. Warren says FPC's management savvy, luck and the company's efforts to "buy time" and forestall major construction with load management techniques and power purchases have played a large role in FPC's favorable competitive position. The company has been able to drop rates while other utilities have been raising them, he points out. FPC's comparatively low industrial rates were also the precipitating factor in an antitrust lawsuit filed by Union Carbide last October and currently pending in federal court. After Florida Power & Light (FP&L) failed to gain Commission approval for a special rate to keep Union Carbide from installing power production facilities at its air separation plant at Mims, Florida, Carbide began coveting the less expensive power enjoyed by its competitors 40 miles
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away. FP&L refused Carbide's request to wheel power from FPC on the basis that the utilities operate according to an approved territorial allocation agreement. Carbide subsequently filed a lawsuit claiming allocation of customers and territories was inherently anticompetitive and violated antitrust laws. Union Carbide spokesman Harvey Cobert said the company is paying FP&L 35% more for power than similar industrial customers pay FPC. The load at Mims is about nine megawatts, and electricity accounts for 70 percent of the production costs at the plant. "Our competitive disadvantage is obvious," Carbide says. Union Carbide has asked the court to order FPC to provide power and order FP&L to provide transmission. Carbide has not specified its request for damages, but believes they are substantial, amounting to millions of dollars, Cobert said. A motion for summary judgment filed by Florida Power & Light Co. is pending before the Tampa court. The Florida Commission has opined that FP&L is correct in refusing to wheel power for Union Carbide because of the state's system of territorial allocation. The PSC has not formally intervened in the federal case but is likely to file an amicus brief maintaining that the issue of territorial allocation is a matter for the Florida legislature, not the federal judiciar~ --Sonya Bruce
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