News Digest

 

Transmission & ISOs

Return on Equity. The FERC upheld a 10.56 percent return on common equity approved by an administrative law judge (ALJ) for electric transmission service provided by New York State Electric & Gas Corp., even though the ALJ relied on the same two-stage method for estimating dividend growth (commonly applied in gas pipeline rate cases) that the commission rejected in the Southern California Edison case in late July as inappropriate for the electric industry, and where it set a higher return of 11.6 percent.

It said that the 10.56 figure was acceptable for NYSEG because it fell within the reasonable range that would have emerged had the ALJ used the preferred method. .

QF Power Purchases. In a transmission rate case, the Federal Energy Regulatory Commission ruled that Niagara Mohawk had failed to justify a rate allowance for expenses it paid to qualifying cogeneration facilities (QFs) to cover so-called "avoided transmission costs," after the New York PSC had OK'd that item as an element of purchased power rates owed to QFs under the Public Utility Regulatory Policies Act (PURPA).