Fortnightly Magazine - October 15 1997

People

The board of the California ISO selected Jeffrey D. Tranen as its first CEO. Tranen is former president of the New England Power Co., senior v.p. of the New England Electric System and chair of NEPOOL. The ISO starts operation Jan. 1, 1998.

Charles F. Gay, Ph.D., former director of the DOE's National Renewable Energy Laboratory, was hired as president and CEO of ASE Americas Inc. Klaus Albrecht, former president and CEO, will serve on ASE's board and as senior v.p.-business development.

In Brief...

Sound bites from state and federal regulators.

Area Code Overlays. Colorado adopts overlay plan to ease telephone-number shortage in Denver area, and will introduce a single new area code over the area served by 303 code. PUC says the approved plan meets FCC requirements to ensure new area codes do not disadvantage new providers. Docket No. 97A-103T, July 29, 1997 (Colo.P.U.C.).

Water Main Extensions. Interpreting a recent policy statement, state regulators approve proposal by Pennsylvania-America Water Co.

Joules

A $35 million, 45-mile Texas-to-Mexico natural gas pipeline is set to be ready by mid-December. With a capacity of 212 MMBtu/d, the 24-inch diameter pipeline will supply the 700-megawatt Samalayuca I and II power plants, set partially to open in 1998. El Paso Natural Gas Co. and El Paso International Co. are partnered with Pemex Gas Y Petroquimica Basica in the 50-50 joint venture.

El Paso International also has signed a joint development pact with Furnas Centrais Eletricas S.A., BHP of Brazil Energy, Centrais Electricas Brasileiras S.A., and British Gas of Brazil.

Illinois Court Faults Notion of Higher Risk for ComEd

An Illinois appeals court has questioned the idea that Commonwealth Edison Co. faces a higher degree of risk than other utilities (and thus deserves a higher return on equity), but also has affirmed the "used and useful" status of the company's Byron 2 and Braidwood 1 & 2 nuclear units, as approved by the Illinois Commerce Commission in a 1995 rate case order, which had helped justify a $303-million increase in annual rates.

California PUC Issues Final Rate Unbundling Order

The California Public Utilities Commission issued its final order on unbundling rates for generation, transmission and distribution functions performed by the state's three largest investor-owned utilities on Aug. 1.

The commission also determined how to calculate transition costs and addressed customer billing and education issues. (Decision 97-08-056, Docket A. 96-12-009 et al.)

The utilities affected are Pacific Gas and Electric, San Diego Gas & Electric, and Southern California Edison.

Rates by Function.

LDC to Recoup Loss from PUC Error On Goodwill

The Minnesota Supreme Court has ruled that Minnegasco may recover revenues it had lost when the state public utility commission improperly cut rates to recognize goodwill supposedly contributed by ratepayers to an unregulated affiliate.

An intermediate appeals court had agreed that the rate cut was improper, but had believed that the rule against retroactive rate making had barred any commission move to recoup the money for the utility.

The case involved an unregulated utility affiliate that performed appliance repair service.

Gas Accord Unlocks PG&E Market Hold

The California Public Utilities Commission has approved "Gas Accord," a settlement that enhances competition by restructuring the way natural gas is bought, sold and transported (Decision 97-08-055, Docket A.92-12-043).

"This is a landmark step to further deregulate the natural gas industry here in California," said Jack Jenkins-Stark, PG&E senior v.p. "These changes parallel those in the electric industry."

The collaborative settlement unbundles rates for transporting natural gas on PG&E's system.

Vermont Slaps Utility With Fines, Rate Reductions

Finding "a long and persistent record of misconduct and mismanagement," the Vermont Public Service Board has ordered Citizens Utility Co. immediately to reduce rates by 16.53 percent and pay fines totaling $60,000.

The board also reduced the company's return on equity from 10.5 to 5.25 percent, citing what it said were improper accounting practices, permitting failures and other bad management practices.

SoCalEd Begins Plant Auction

Southern California Edison has begun auctioning its 12 gas- and oil-fired generation plants. The plants boast an operating capacity of about 10,000 MW and a combined value of about $700 million.

The auction is being conducted in two phases. The first phase began Aug. 5, when SoCalEd sent out a confidential offering memo for its five "non-must-run" plants. The second phase took place in late August, when SoCalEd auctioned "must-run" plants.

Court Dismisses Telephone "Rounding Up" Complaint

A New York appeals court has dismissed a claim for damages brought by a telephone consumer complaining that he had been defrauded by a local telephone carrier's policy of rounding up charges to the nearest whole-minute increment.

The consumer claimed that the carrier, NYNEX Corp., had "secretly and fraudulently" followed a policy of charging for phone calls in whole-minute increments only. The consumer charged the company with violation of the state's public utilities laws, common law fraud, negligent misrepresentation and false advertising.

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