ERS Group Addresses Municipalization Proposals in Electric Power ERS Group Director Michael Doane examined the economic consequences of municipalities' attempts to condemn electric utility distribution systems to evade industry restructuring charges. Mr. Doane's analysis examined more than forty municipalization proposals and their relationship to restructuring requirements imposed by the U.S. Federal Energy Regulatory Commission. The effect of the municipalization proposals on existing risk-sharing arrangements and industry costs was also investigated. ERS Group Assists the IRS in Tax Dispute with Exxon ERS Group Director Michael Williams provided expert witness testimony on behalf of the U.S. Internal Revenue Service regarding the market value of natural gas for severance tax purposes. The testimonies addressed issues relating to the determination of a "representative market or field price" for certain sales of natural gas by the Exxon Corporation in the 1970s. ERS Group Participates in Midwest Gasoline Price Investigation ERS Group economists assisted the U.S. Federal Trade Commission in its investigation into the causes of large increases in gasoline prices occurring in certain Midwest markets in the spring and early summer of 2000. One purpose of the investigation was to determine whether those price increases were caused in whole or in part by antitrust violations. ERS Group Examines Proposed Rule Changes in Electricity Generation Markets ERS Group Director Michael Doane, together with ERS Group Special Consultant David S. Sibley of the University of Texas at Austin, submitted testimony in response to tariff changes requested by the California Independent System Operator concerning the participation of Reliability Must Run (RMR) generating units in open markets. Their testimony before the U.S. Federal Energy Regulatory Commission addressed the extent to which the pre-dispatching of RMR generation into the California Power Exchange day-ahead market would likely reduce "volatility" in the real-time market or exacerbate price spikes when real-time demand is higher than expected. ERS Group Assesses "Code of Conduct" for Electricity Distribution Company ERS Group Director Michael Doane assisted an electric utility in its evaluation of the economic consequences of a restructuring plan proposed by a state public service commission. The examination focused on a proposed code of conduct to govern the relationship between the company’s regulated wire business and its competitive, unregulated businesses. ERS Group Reviews FERC Auction Proposal for Pipeline Capacity On behalf of a major interstate pipeline, ERS Group Special Consultant R. Preston McAfee and Academic Affiliate Charles Plott submitted a statement to the U.S. Federal Energy Regulatory Commission (FERC) in response to a Notice of Proposed Rulemaking concerning a proposed auction of pipeline capacity. Professors McAfee and Plott concluded the proposal raised a number of difficult auction issues that had not been resolved either theoretically or experimentally by experts in auction design. Although the use of capacity auctions has promise for improving the performance of the natural gas industry, the ERS Group experts recommended to the FERC that it should proceed cautiously and avoid the creation of a deficient auction mechanism. The FERC agreed and chose not to implement the proposed auction.