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Fortnightly Magazine - July 15 1995

Coal Hauling Contract Leads to Virginia Power Refund

The Virginia Corporation Commission has approved an $8.3-million repayment by Virginia Power (VP) for excessive fuel costs resulting from a 1991 coal-hauling contract with CSX Transportation Inc. The contract became the focus of attention during a dispute last year between the utility and its corporate parent, Dominion Resources, Inc. (DRI).

Commission staff found in a January report that DRI chairman and CEO Thomas E. Capps had pressured VP into the contract, which was expected to benefit the company.

Byline: 
Lori A. Burkhart
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Performance-based Ratemaking

Performance-based ratemaking (PBR) departs from the cost-of-service standard in setting just and reasonable utility rates, but that departure isn't as easy as it looks.

Up until now, cost-of-service ratemaking has provided relatively stable rates, while enabling utilities to attract enormous amounts of capital. Of late, however, regulators appear to be heeding the argument that changing markets warrant a second look.

Byline: 
Phillip S. Cross
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Wisconsin Wants More EMF Research on Farms

The Wisconsin Public Service Commission (PSC) has called for additional research on Wisconsin dairy farms to determine what impact electromagnetic fields (EMF), direct current, and ground currents may have on dairy cattle. According to the PSC, Wisconsin farmers have been noticing behavioral changes in their milking herds for some years now (em changes that affect milk production.

Byline: 
Lori A. Burkhart
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Two More States Launch Electric Restructuring

Utility regulators in Minnesota and Nevada have opened dockets on electric utility restructuring, citing (Minnesota) the Energy Policy Act of 1992 as having lifted barriers to wholesale competition, and seeking (Nevada) recommendations on alternative ratemaking.

The Minnesota Public Utilities Commission (PUC) said it would view open competition as "one part of a continuum of possible change," from traditional vertical integration to full deregulation.

Byline: 
Phillip S. Cross
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Texas Opens Up Local Phone Service

Texas Gov. George Bush on May 26 signed into law a comprehensive bill, H.B. 2128, that makes sweeping changes in the way the state regulates telecommunications. The bill allows competitors to provide local exchange services by obtaining a certificate of operating authority (COA) or to resell local services through a service-provider certificate of operating authority. The COA is designed for facilities-based local exchange, and requires competitors to serve customers within a 27-square-mile area within 30 days of customer request.

Byline: 
Lori A. Burkhart
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DSM Phase-out Ordered for LDCs

The Massachusetts Department of Public Utilities has decided to phase-out existing demand-side management (DSM) incentives for the state's natural gas local distribution companies (LDCs). It said that any claims by LDCs for future recovery of lost margins and incentives will be examined in light of changes in the gas industry and the DSM marketplace. It added that the LDCs should propose a phase-out of their lost margin and DSM incentive programs in conjunction with proposals for incentive-based ratemaking or in their future DSM cases. Re Boston Gas Co., D.P.U. 94-15, Apr.

Byline: 
Phillip S. Cross
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PSE&G Makes Innovative Emission Reduction

Public Service Electric and Gas Co. (PSE&G) and Merck & Co. have announced a trade of emission reduction credits as part of a broad initiative to develop a market-based response to combat the ozone nonattainment problems in the Northeast. PSE&G will sell a minimum of 10 and a maximum of 75 tons of nitrogen oxide (NOx) pollution reductions, called "surplus discrete emission reductions" (SDRs), to Merck in 1995. Merck will use the SDRs to comply with environmental requirements at two industrial boilers.

Byline: 
Lori A. Burkhart
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California Extends Incentive Rate Plan

The California Public Utilities Commission has issued a "positive" performance rating for the first year of a two-year, experimental performance-based rate program for San Diego Gas and Electric Co.'s gas procurement and electric generation and dispatch activities. It extended the plan another year, to facilitate the second year's annual review, and said it expects the plan to stay in place "well into the third year" of the trial. Re San Diego Gas & Elec. Co., Decision 95-04-051, Applica. 92-10-017, Apr. 26, 1995 (Cal.P.U.C.).


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Byline: 
Phillip S. Cross
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Illinois Joins Reform Movement

The Illinois legislature has established a committee to study reforming the electric utility industry in Illinois through competition. The Joint Committee on Electric Utility Reform will be guided by Energy Choice 2000, a proposal that would allow utilities to compete for large customers as of 2000. The Illinois Commerce Commission (ICC) would have the power to let residential and small commercial customers to select their supplier by 2006. The proposal was developed by the Coalition for Consumer Choice, which comprises various Illinois businesses as well as Illinois Power.

Byline: 
Lori A. Burkhart
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