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Fortnightly Magazine - August 1997

LDC Recovers Coal Tar Cleanup Costs

The Maine Public Utilities Commission has authorized Northern Utilities Inc. to recover coal-tar cleanup costs via a special surcharge.

Under a settlement agreement, ratepayers will pay the full amount of cleanup costs incurred by the LDC on a rolling five-year amortization schedule. The costs will be capped at 4 percent of the company's annual adjusted total firm revenues from sales and transportation customers. Shareholders will bear the carrying costs on all deferred balances during the amortization schedule.

Byline: 
Phillip S. Cross
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Central & SouthWest Power Marketer Gets OK

The Federal Energy Regulatory Commission on June 11 approved the request of CSW Power Marketing Inc. to sell energy at market-based rates due to lack of market dominance.

The FERC in May 1996 had denied an application by CSW, an affiliate of Central and South West Corp., to sell power at market-based rates (Docket Nos. ER97-1238-000 and ER96-1348-001). The approval was based on lack of a comparable, open-access transmission tariff on the systems of CSW's public utility affiliates.

Byline: 
Lori A. Burkhart
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Groups Call Phase-II Filing "Frankenstein"

Two California watchdog groups, The Utility Reform Network and Utility Consumers Action Network, have filed a joint protest at the Federal Energy Regulatory Commission against the proposed structure of California's independent system operator and power exchange (Docket Nos. EC96-19-003 and ER96-1663-003).

The groups believe the proposed structures would hurt small consumers. They noted that although small consumers use about one-third of the state's electricity, they only have two votes out of 26 in both the PX and the ISO.

Byline: 
Lori A. Burkhart
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FERC Praises "Pony Express"

The Federal Energy Regulatory Commission has approved a request by KN Energy Inc. to convert its 900-mile Pony Express Pipeline from oil to natural gas (Docket No. CP96-477-000). The pipeline was expected to begin operating in August, carrying natural gas from several points in the Rocky Mountains to Kansas City.

Through a separate regulatory authority, subsidiary KN Interstate will construct a 36-mile Riverside lateral to the Kansas City market. The FERC approved rolled-in rate treatment for the pipeline.

The project garnered praise from the FERC.

Byline: 
Lori A. Burkhart
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PJM Restructuring Battle Continues

Nine members of the Pennsylvania-New Jersey-Maryland Power Pool filed a revised plan at the Federal Energy Regulatory Commission to establish an independent system operator for the Mid-Atlantic power market.

The utilities have been battling with lone dissenter PECO Energy over the details of the ISO.

The nine utilities, dubbed the "supporting companies," agree on the form that an ISO should take. In November 1996, the FERC had rejected ISO proposals by both parties as having failed to comply with Order 888.

Byline: 
Lori A. Burkhart
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FERC to use GDP to Estimate Equity Return

Through two orders issued on June 11, the Federal Energy Regulatory Commission has set policy on return on equity for interstate natural gas pipelines (em specifically, the component of long-term dividend growth in the discounted cash flow model.

In both cases, the FERC applied the long-run growth rate of the economy, as measured by the U.S. gross domestic product. (See, Re Northwest Pipeline Corp. Opinion No. 396-B, Docket Nos. RP93-5-025 and RP93-96-005; Re Williston Basin Interstate Pipeline Co., Docket Nos.

Byline: 
Lori A. Burkhart
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In Brief...

Sound bites from state and federal regulators.

Overseas Investment. Michigan certifies plan by Consumers Electric and Gas Co. to bid on the outstanding equity of three electric distribution companies being privatized in Buenos Aires, Argentina. Case No. U-11331, April 14, 1997 (Mi.P.S.C.).

Appliance Repair Rates. New Jersey OKs rates for Public Service Electric and Gas Co.

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Pennsylvania Electric Restructuring Continues

The Pennsylvania Public Utility Commission has taken new steps in its ongoing effort to restructure the state's electric industry, proposing regulations to govern customer choice of energy suppliers and securitization of stranded costs.

The PUC's new actions on retail choice and stranded costs were designed to comply with state legislation passed last December, known as the Electricity Generation Customer Choice and Competition Act. See, 66 Pa.C.S. secs. 2801 et seq.

In fact, the PUC began last January to implement the new state legislation.

Byline: 
Phillip S. Cross
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Florida Utility Expands Green Pricing Program

The Florida Public Service Commission has authorized Florida Power and Light Co. to set up a two-year green pricing research and development project under a settlement agreement between the utility and the state Legal Environmental Assistance Foundation.

The order allows FP&L to recover from all ratepayers up to $475,000 in administrative costs associated with the experiment. The commission had approved the program as proposed by the utility in an earlier ruling, but reviewed the matter further because of a complaint by LEAF.

Byline: 
Phillip S. Cross
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