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Fortnightly Magazine - March 15 1997

Ohio To Look at Emissions Trading in Fuel Clause Cases

The Ohio Pubic Utilities Commission has approved a series of amendments to its rules on fuel cost adjustments for electric utilities, implementing previously approved guidelines for the ratemaking treatment of emission allowance transaction activities.

In the earlier ruling, the commission had found that its Electric Fuel Component rate mechanism provides the most appropriate forum for review of emission allowance plans, transactions and recovery of associated costs.

Byline: 
Phillip S. Cross
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FERC Revisits Order 888

Tightens postings rules for transmission discounts; expands jurisdiction on stranded costs in municipal annexations.

The Federal Energy Regulatory Commission on Feb. 26 revisited its Order 888 open-access transmission decision, reaffirming its core framework but making changes by granting rehearing on two key issues.

Stranded-cost recovery associated with municipal annexation was revisited. In addition, the FERC updated the discounting of transmission services (See, Order 888-A, Docket Nos. RM95-8-001, RM94-7-001, and RM95-9-001).

Byline: 
Lori A. Burkhart
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High Court Upholds Dichotomy in Tax Case

The U.S. Supreme Court in late February ruled that it is constitutional for Ohio to impose a 5-percent use tax on purchases of natural gas from an out-of-state natural gas marketer, when the same purchases would have been exempt from tax had the purchaser bought the gas from an in-state local distribution company.

Nicholas Bush, Natural Gas Supply Association president, expressed disappointment with the decision and called it a setback for development of a national, competitive natural gas marketplace.

Byline: 
Lori A. Burkhart
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Growing Nuclear Safety Problems Expand NRC's Watch List

The Nuclear Regulatory Commission has placed 14 nuclear reactors on its watch list(emthe highest number in about 10 years(emdue to safety problems. The plant were placed on the watch list by senior NRC managers at their semi-annual performance review of operating nuclear plants and fuel-cycle facilities.

The NRC also sent a letter to Commonwealth Edison asking the utility to explain why it should be allowed to operate six nuclear units at three of its nuclear plants that are on the list. Commonwealth is improving performance at each site.

Byline: 
Lori A. Burkhart
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Schaefer Reintroduces Restructuring Bill

House Energy and Power Subcommittee Chairman Rep. Dan Schaefer (R-Colo.), recently reintroduced his comprehensive electric restructuring bill, which largely mirrors legislation Schaefer had introduced in the 104th Congress.

The new bill, "Electric Consumers' Power to Choose Act of 1997" (H.R. 655), was presented Feb. 10 and differs from the original only in that it would not preempt the state restructurings already taking place.

Byline: 
Lori A. Burkhart
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FERC To Address Market Power, Must-Run Plants

California's three largest investor-owned utilities have petitioned the Federal Energy Regulatory Commission to convene a technical workshop on market-power issues raised by electric deregulation. Although a workshop had been held on Jan. 17, the utilities say the need more guidance (Docket No. ER96-1663-000).

The utilities are most concerned with the issue of "must-run" plants, and how to minimize the market power of generating units that must run to maintain reliability.

Byline: 
Lori A. Burkhart
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Congressmen Working To Eliminate Federal Payments to TVA By Restructuring

Responding to a call by Tennessee Valley Authority's Chairman Craven Crowell to eliminate the $106-million, annual appropriation provided to it, Representatives Bob Franks (R-NJ.) and Marty Meehan (D-Mass.) on Feb. 5 introduced a bill to end that federal payment.

The congressmen, who also co-chair of the Northeast-Midwest Congressional Coalition, distributed a study outlining the $1.2 billion in annual indirect taxpayer subsidies provided to TVA.

Byline: 
Lori A. Burkhart
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In Brief...

Sound bites from state and federal regulators. Gas Load Building. Finding no protest from electric utilities, North Carolina waives requirements for preliminary cost-benefit analysis and approves incentive programs for Piedmont Natural Gas Co. Inc., designed to boots gas load by installing commercial gas cooking equipment at community colleges for use in culinary degree programs. Commission tells company to conduct a cost-effectiveness analysis as soon as it can gather the necessary data from actual operating experience. Docket No. G-9, Sub 377, Jan. 31, 1997 (N.C.U.C.).

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LDC Fails in Bid To Recover Coal Tar Cleanup Costs

The Indiana Court of Appeals has upheld a ruling by state regulators denying permission to Indiana Gas Co. to recover costs associated with the cleanup of environmental contamination at former gas manufacturing sites.

The court could find no direct connection between coal tar cleanup and the current provision of gas distribution service, which it described as a necessary condition for cost recovery, even if the property is currently in use by the utility.

Byline: 
Phillip S. Cross
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PG&E Must Honor Multi-year Rate Plan

The California Public Utilities Commission has rejected a request by Pacific Gas and Electric Co., for a waiver from scheduled rate reductions mandated under a three-year base-rate plan approved in December 1995.

The court said the company has shown no "extraordinary circumstances" to support breaking the three-year rate contract.

The utility had claimed it would incur greater-than-expected maintenance and service expenses in areas such as tree trimming, meter reading and meter repair.

Byline: 
Phillip S. Cross
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