 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
 |
 |
 |
 |
|||||||||||||||||||||||||||||||||||||||
 |
 |
|||||||||||||||||||||||||||||||||||||||||
 |
 |
 |
 |
 |
 |
 |
||||||||||||||||||||||||||||||||||||
|
|
 |
TransActions - July 2000 (Vol
300)
A VALUABLE TOOL IN A COMPETITIVE ENVIRONMENT GIS, geographic information system, is a method for representing information spatially. The most prevalent example of this type of information is the common roadmap. GIS has been used, in one form or another, for thousands of years. Early drawings on the walls of caves that depicted hunted animals and landscape directions for their migratory patterns are among the oldest examples. Now, GIS software applications have left road maps and cave drawings in the dust. In a hi-tech world, GIS applications now offer effective management tools in a highly competitive environment. GIS Maps Entire Systems One of the most common uses for GIS in the utility industry is the “mapping” of a utility system, such as the water distribution system in a city, or even a neighborhood. This use is quite similar to a Computer Aided Design and Drafting (CADD) drawing of the system and specifies the location of mains, laterals, valves, tanks, meters, etc. It is, in essence, an inventory of the system’s components placed spatially on the map of the service area. Originally thought of as a technician’s tool for locating items on a drawing, GIS software has developed into a dynamic, interactive system for managing information, a portion of which can be represented spatially. It has a wide variety of uses in utility systems and these uses are increasing. It has become not only a technician’s tool, but also a tool that can be used by maintenance, finance, customer service, transportation, environmental and other departments within the utility. Unlimited Responsibilities Using the GIS system inventory as a base, a maintenance department can incorporate attributes to the software. These attributes can include information such as manufacturer, model number serial number, date installed, condition assessment, and date last serviced. These particular attributes can assist the maintenance department in locating items affected by recall notices, implementing and recording preventive maintenance schedules, and tracking existing projects. By adding topographical characteristics into the GIS database, network tracing can be supported and used to analyze specific properties or services that may be impacted by such events as stoppages, breaks, drainage defects and transformer outages. Using the same database, the engineering department can add attributes associated with current or planned projects such as contractor name, asset changes, cost and implementation date. Thus, the contractor’s progress can be charted and analyzed. When the project is completed, the asset inventory can be updated with the as-built changes for an accurate, up-to-date system drawing and asset information. With this information stored in the system, the engineering group can, over the long-term, assess the quality of the contractor’s work through problem and maintenance information analysis. Through image integration, images can be stored and displayed with footage readings to provide additional information to TV inspections of underground piping. Environmental impact, assessment and tracking can be accomplished through the addition of the appropriate information into the GIS database. Through the addition of the storage locations for potentially hazardous materials, the environmental and safety departments can use the GIS database to assist in regulatory compliance. Underground storage tank management can be accomplished through the addition of the appropriate data. Contaminate plumes can be plotted and tracked over time to analyze and monitor remediation efforts. GIS software can assist in disaster planning in the areas of evacuation routes, service re-routing, efficient repair planning and communications. A utility’s marketing group can use a GIS information system in the identification and development of expansion opportunities. Areas of potential expansion can be identified through the mapping and analysis of existing system capacity, adjacent growth areas, underserved customers and strategic growth strategies. The customer service area is an excellent application for GIS information. By adding to the GIS database attribute information such as customer name, address, telephone number, a customer service department can improve customer communications concerning outages, repairs, complaint tracking and other areas of interest. This same information can be used to improve meter-reading routes. Some utilities have combined this type of information with Advanced Vehicle Location (AVL) technology to determine things like the real-time location of repair vehicles. By doing so, rapid response to problems and more efficient scheduling can be realized. The financial arena can also benefit from using the GIS database. By using the system inventory information and adding FERC account numbers, dollar values and installation dates, the financial and administration areas can facilitate the compliance with FERC requirements as well as the fixed asset inventory system. By keeping track of the utility poles utilized in joint use areas, the GIS software can assist in the development of accurate billings to the pole renter. GIS software could also be used in the areas of budget forecasting, customer billing, inventory analysis and other key financial and administrative functions. All of the previously mentioned uses of GIS software are currently in use by a number of utility companies today and even more are under development. The reason is simple. The utility industry is becoming more and more competitive. In order to survive this new competitive era, more utility companies are looking for ways secure their existing customer bases and find methods to expand their services as well as their business. Geographic information systems are playing a larger and larger part in the solutions to the opportunities offered by increased competition. GIS provides verifiable productivity improvements, increased efficiencies and enhancements to competitive edge. Proof of GIS is at GDS GDS Associates is utilizing GIS for many Electric, Natural Gas, Water & Wastewater projects. The application of GIS has greatly reduced the time and effort required to develop utility asset inventories, work with utilities as they plan for expansion, assist with economic development planning and monitor utility preventive maintenance programs. GDS is also using GIS to facilitate the development and implementation of emergency action plans. GIS has proved to be a very valuable tool for GDS. It maybe a solution for you too. For more information on GIS applications, please contact Mr. Jim Willcox at 770-425-8100 or e-mail: info@gdsassociates.com. ANTITRUST LAWS OUR CHARTER OF ECONOMIC LIBERTY The following article was written by Robert A. Jablon, a business associate of GDS and partner in the law firm of Spiegel & McDiarmid, Washington, D.C. Antitrust laws are designed to prohibit acts of monopolization that can eliminate competition . . .because without competition our economic system would collapse. As Supreme Court Justice Hugo Black put it, the antitrust laws are the “charter of economic liberty.” They are designed to prohibit monopolies from leveraging their economic power. Yet the interpretation of these laws is not constant. Over the past 30 years, they have changed with changes in business practices, technology and political attitudes. Surviving the Changes Changes in the electric power industry have added to the challenge, making antitrust enforcement increasingly important to the economic survival of electric cooperatives, municipals and all others who compete with much larger systems. From their inception, nearly all cooperatives and municipals have been dependent on much larger, dominant companies essential services. These companies’ fondest wish has often been to eliminate neighboring coops and munis. The very existence of smaller systems proves that there are alternatives to private power company service. Thus, many companies refused to sell transmission, wholesale power, back-up and coordination services or have otherwise discriminated in the sale of essential services. Blatant private-utility refusals to deal waned in the 1970’s and early 1980’s. In this period the Supreme Court decided three important cases[1]. These cases made clear that utilities could not preserve or extend their monopolies by refusing to sell transmission services. In addition , the Nuclear Regulatory Commission made clear that it would enforce smaller system antitrust rights as condition to licensing nuclear plants. EPAct. . . A positive Step In the 1980’s a second phase of antitrust activity began. (The phases overlap; company motivations often stayed the same.) Major utilities were forced to recognize cooperative and municipal rights, at least in their broadest sense. Because of legal pressures, companies could no longer say flat out that they would not transmit for, coordinate with or sell wholesale power to smaller systems. Many large systems adopted more sophisticated approaches. They found technical and economic reasons to delay providing service or to discriminate. Thus, for example, they would often constrain transmission availability to smaller systems to point-to-point service, apply contract limitations as to the amount and nature of transmission use, impose drastic penalties, non-cost-based rate ratchets, unjustified minimum quantities and other pricing mechanisms to charge for unused transmission, insist on expensive and time consuming studies or find transmission capacity limitations. At the same time, transmission owners would press legal arguments that their anticompetitive conduct was justified for “legitimate” business reasons or that their conduct was insufficiently harmful to rise to an antitrust violation. Although many of these tactics continue, they have become less effective with the passage of the Energy Policy Act of 1992 or EPAct. As a precursor to EPAct’s passage, Senators Bennett Johnston, Chairman of the Senate Energy Committee, and Donald Riegle, Chairman of the Senate Banking Committee, agreed in a 1992 Senate Colloquy: It is in the interest of consumers and the public generally for transmission owners to provide transmission access and use on rates and terms that are non-discriminatory compared with the transmission access and use available to themselves, their affiliates and others. (138 Cong. Rec. S1197-98 (daily ed. February 6, 1992)).After passage, FERC cited this Colloquy to support its “Golden Rule” of equal transmission access. By leading to FERC-required open access transmission tariffs and underscoring the importance of transmission to competitive markets, EPAct helped limit (not eliminate) the ability of transmission owners to deny transmission by delay and to provide blatantly non-comparable treatment. Most importantly, FERC ruled that discrimination was to be measured against the quality of service that is available to transmission owners. New Challenges Ahead Today we are entering a new phase of electric industry changes. These include strong merger trends; the formation of large regional transmission systems; generation deregulation and the “commoditization” of electricity. Among the consequences is the disappearance of access to cost-based power and regulatory protection against overpriced wholesale power and coordination services. However, there are manifest generation as well as transmission market imperfections such that no smaller system can presume “that the market will take care of” market power problems. If anybody has doubts, think about how we would react to a market in which gasoline prices fluctuate between 50 cents and $200 per gallon. (The analogy is Dave Penn’s of APPA.) This approximates the range of wholesale power market swings. In a “load pocket,” a power supplier can sell power during certain hours for perhaps $1,000 per mwh, which would otherwise cost from $20 - $30. The nature of electric problems is shifting. Many coops and munis (or their G&T’s and power supply agencies) have had to become familiar with various types of commodity markets, financial insurance and back-up arrangements, as well as all sorts of new forms of transmission and generation sales. Some of these arrangements are closer to those in information technology than those in traditional electricity markets. Coops, munis and other electricity “players” and their customers can be hurt by ever more sophisticated acts of transmission and generation monopolization, but also by the exercise of market power over key information, financial transactions, generation and transmission facilities and the arrangements and mechanisms that provide economic control in today’s specialized markets. All these changes pose antitrust challenges and needs for antitrust enforcement. Although FERC has technical jurisdiction in many of the problem areas, the nature of transactions may be such that FERC cannot or will not correct against competitive abuse. In some situations, FERC may view that in opening transmission, it has done its job. Where the problem is one of structural barriers to competition or conduct to create market barriers by those who have disparate market power, the antitrust laws often provide the most effective – or only – remedy. The Microsoft Analogy Current energy markets have been characterized by an emphasis on short-term transactions, volatility, transmission barriers, concentrated generation, increased reliance on financial mechanisms and regulatory change and sometimes inaction. Thus, the current phase of industry antitrust protection must guard against the exercise of undue control in markets for short-term, unregulated sales as well as against more traditional abuses. This phase will concern market exchange activity, transmission functioning, information availability, and specialized forms of market power. Recent antitrust decisions concerning Microsoft may point a direction. Microsoft was found to have monopolized in very traditional ways. But its exercise of power took place in highly specialized markets. Thus, Microsoft was found to have abused its control in a market defined as the Intel-compatible personal computer market. What makes the Microsoft decision so important to those in electricity and other utility industries is its application of antitrust laws to emerging technology areas. These are where we may face our greatest challenges. As new electric institutional arrangements take hold and regulation weakens, the importance of antitrust law may become even more important to smaller, dependent systems than they have been in the past. The premise of capitalism is that anybody can compete. This leads to a fair (or at least an efficient) price for goods and services. If one is blocked from entering or fairly competing in a market, innovation is blocked and the consumer is overcharged. Protecting competition and the antitrust laws are essential to maintaining our “charter of economic liberty” Robert Jablon has worked extensively on antitrust and economic regulation matters. He contributed to the language of the 1992 Senate Colloquy that preceded the EPAct. He was involved in the recently settled Florida Municipal Power Agency vs. Florida Power and Light case. For more information contact Jim McGaughy at 770-425-8100 or e-mail: info@gdsassociates.com. Footnote: *Otter Tail Power Co. v. United States, 410 U.S. 377 (1973); Gainesville Utils. Dep't v. Florida Power Corp., 402 U.S. 515 (1971); and Gulf States Utilities Co. v. F.P.C., 411 U.S. 747 (1973)
|
||||||||||||||||||||||||||||||||||||||||
