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Fortnightly Magazine - January 15 1997

INGAA Sees Renewed Interest in LNG

A study procured by the INGAA Foundation (Interstate Natural Gas Association of America) finds a resurgence in use of liquefied natural gas (LNG) as a peak-shaving alternative for local distribution companies (LDCs).

The study, "The Use of Liquefied Natural Gas For Peaking Service," conducted by Stone & Webster Management Consultants, Inc., attributed a rise in the use of LNG plants for peak shaving to a deregulated environment (FERC Order 636, plus use of the "straight fixed-variable" rate design for gas pipeline capacity), which forces LDCs to assess their true capacity needs.

Byline: 
Lori A. Burkhart
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New Mexico To Write Off PUC

Voters in New Mexico have decided to abolish the New Mexico Public Utility Commission, as well as the New Mexico Corporation Commission.

The two agencies would be replaced by a five-member, Public Regulatory Commission, which would regulate electric, water, telephone, and insurance companies, plus natural gas and oil pipelines. t

Lori A. Burkhart is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

Byline: 
Lori A. Burkhart
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Perspective

An oft-heard argument these days says that states with low-cost power should refrain from restructuring their electric utilities. This argument has gained credence in some states, where protectionists have used it to slow down the liberalization of electricity markets. The rationale is simple: Because the state would export its low-cost power, local consumers would lose. They would face higher electric prices than if their state had somehow confined its low-cost resources within its boundaries.

Byline: 
Kenneth W. Costello
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FERC Issues Long-Awaited Merger

More than a year and a half after commissioners Hoecker and Massey first raised eyebrows in various concurring and dissenting opinions by suggesting changes in the merger approval process for electric utilities, the Federal Energy Regulatory Commission (FERC) on December 18 issued Order 592, a "policy statement" designed to "update and clarify" the criteria it will use to ensure that mergers remain consistent with the public interest.

Backing away from the historical six-part merger approval test established in 1966 in the Commonwealth Edison case, the FERC announced that it would ap

Byline: 
Lori A. Burkhart
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EIA Predicts Further Nuclear Growth

According to a new report from the U.S. Energy Information Administration (EIA), nuclear power continued as an important source of electricity in 1995, accounting for 22 percent of total worldwide electric generation. The report, "Nuclear Power Generation and Fuel Cycle Report 1996," projects continued worldwide growth for nuclear plants in the near term, but uncertain long-term prospects.

Worldwide, nuclear plants generated

2,225 terawatt-hours in 1995, a four percent increase from 1994 (one terawatt equals 1000 gigawatts, or one million megawatts).

Byline: 
Lori A. Burkhart
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NRC Sets Up Nuclear Waste Internet Site

The Nuclear Regulatory Commission (NRC) has launched a discussion site on the internet as a first step towards updating plans for the "Licensing Support System," an electronic information management program to be used in the eventual licensing of a high-level radioactive waste repository.

The program, known as "LSSNet," may be reached at its internet address: http://lssnet.llnl.gov. It will continue through May 20, 1997. The internet dialogue is not intended to replace formal comments on any proposed rule that may be developed to update the licensing support system. t

Lori A.

Byline: 
Lori A. Burkhart
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Financial News

Which matters most: Cost? Price? Sales? Regulation?

Many investors no longer think of electric utility stocks primarily as dividend-rich, income-oriented investments. Instead, they have begun to consider new criteria in evaluating utility stocks (em criteria that might help explain some of the variations in equity price performance now seen among various utility companies.

Byline: 
John L. Domagalski, Agustin J. Ros, and Philip R. O'Connor
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Mitigating Transition Costs: The Utility's Role

How a sample electric company could reduce risk of loss by upgrading performance to industry benchmarks. Competition in electric generation will expose utility costs that exceed those of alternative suppliers. Roughly speaking, these above-market ("transition") costs should track the difference between the new market price and the embedded cost set by traditional cost-of-service regulation.

The problem has attracted no shortage of proposals.

Byline: 
Lester W. Baxter, Stanton Hadley, and Eric Hirst
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In Brief...

Sound bites from state and federal regulators.

Natural Gas Briefs

Gas Rate Indexing. Alabama continues its a rate stabilization and equalization (RSE) procedure for Alabama Gas Corp. (rates adjusted quarterly to conform return on equity to a preset range). Commission says RSE plan has helped company address recent gas market changes such as supply diversification, system bypass, and competition. Docket No. 25600, Oct. 7, 1996 (Ala.P.S.C.).

Gas Motor Vehicles. Peoples Natural Gas Co.

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