While authorizing Nashville Gas Co. to increase rates by $4.417 million, the Tennessee Regulatory Authority has modified its existing policy on the treatment of advertising expenses in gas rate cases.

The authority abandoned a past policy limiting advertising recovery to 0.5 percent of the company's gross revenues. It also ordered a 50-50 sharing between ratepayers and shareholders. It granted, however, the LDC's request for full recovery of both payroll and nonpayroll "sales promotion" costs, rejecting allegations the costs should be treated as advertising expenses.

The New Mexico Public Utility Commission has authorized, subject to a series of conditions, the proposed merger of Southwestern Public Service Co.

Responding to numerous complaints concerning Bangor Hydro-Electric Co.'s entry into the security alarm market, the Maine Public Utilities Commission has set up guidelines for the utility's management of noncore services.

The commission ordered Bangor to: establish a separate subsidiary for its "noncore" utility activities; account for the activities "below-the-line"; and limit its use of certain customer information in providing the ancillary services.

The Ohio Public Utilities Commission has approved a rate plan for Toledo Edison Co. and Cleveland Electric Illuminating, under which the two electric utilities will freeze both base rates and fuel charges and agree to reduce their present investment in generating station and related assets.

The plan will take effect only if Centerior Energy Corp., the holding company for both utilities, is successful in its proposed merger with Ohio Edison Co. (The approved plan is similar in many ways to one the commission had authorized for Ohio Edison in 1995 (em see Case No.

In a pair of orders issued the same day, the California Public Utilities Commission has denied requests to modify its plan for electric industry restructuring, as set out in its Final Policy Decision of Dec. 20, 1995 (see 166 PUR4th 1), but has initiated new "public service programs" to continue support for energy efficiency and low-income assistance efforts.

PUC endorses direct access, plant divestiture and limits on recovery of stranded costs. Says order will not interfere with 1990 bankruptcy plan for Northeast Utilities. The New Hampshire Public Utilities Commission has issued its final plan for restructuring the state's electric industry, at the same time announcing what is believed to be the first formal policy decision by a state utility commission that would deny full recovery of costs left "stranded" by the transition to competition.

Released on Feb.

Sound bites from state and federal regulators.

Gas Supply Affiliates. Arkansas oks plan by Arkla to continue to rely on NorAm Gas Transmission Co. (an affiliate) for the bulk of its supply requirements, but directs the utility to evaluate its supply options and to "be prepared" to shift to an independent supplier for gas inventory and capacity. NorAm agreed to "rachet-down" its price to meet third-party offers. Docket No. 95-401-U, Order No. 34, Jan. 9, 1997 (Ark.P.S.C.).

Electronic Billing. Michigan regulators approve program by Consumers Power Co.

The Natural Gas Supply Association said that electric restructuring bills proposed in Congress and by the Clinton Administration contain several provisions that could "significantly" and "unfairly" reduce the competitiveness of gas-fired electricity.

NGSA warned that utilities likely will dispatch electricity from different fuel sources in order of lowest-to-highest marginal cost, and the marginal costs of gas-fired power generally are higher than power fired by coal, nuclear and hydro.

The Federal Energy Regulatory Commission has issued its notice of a public conference on "Issues and Priorities for the Natural Gas Industry," which will be held May 29 and 30. The FERC wants to gather information to establish its regulatory goals and priorities in the post-Order 636 environment (Docket No PL97-1-000).

The FERC is requesting a broad analysis of present and future industry issues, including those deemed the highest priority for FERC action.

Calling a proposed Securities and Exchange Commission rule contrary to public policy and law, as well as a "de facto repeal of major provisions of the Public Utility Holding Company Act of 1935," the City Council of New Orleans has asked the Securities and Exchange Commission to withdraw its proposed Rule 58.

"For more than 60 years, PUHCA has shed light on the activities of utility holding companies," said Council President James M. Singleton.