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).

As I leave the electric utility business after 28 years as an engineer and analyst I would like to relate some thoughts on what makes this business special, even as it gives way to competition. Let me offer some advice to "local" electric utilities on how to keep at bay the "Mega Marketers" and "PanElectrics" of the world, who will soon appear to romance away their customers. Keep your "home-field advantage." Capitalize on your traditional strengths and enduring relationships. These bonds represent a wealth of goodwill earned over years of working with customer communities.

Milwaukee County District Attorney E. Michael McCann has been appointed to investigate allegations that Wisconsin PSC member Dan Eastman acted improperly by talking with Wisconsin Energy Chairman Richard Abdoo and others about the proposed "Primergy" merger between WE and Northern States Power Co., prompting sources to speculate that too many delays could kill the merger.

The Minnesota PUC reportedly is also investigating ex parte allegations, but Minnesota DPU Administrative Law Judge Allan Klein has ruled that the merger would not be harmful or anti-competitive.

The Dakota Electric Association, which buys its power from Cooperative Power of Eden Prairie, Minn., has asked the Minnesota Public Utility Commission to allow it to provide its members the option to purchase energy generated from renewable resources. Energy produced by wind generators would be made available to consumers in 100-kilowatt-hour blocks of energy. Customers would be allowed to purchase blocks equal to their normal monthly usage. A 12-month commitment would be required. The cost of each 100-kWh block would be slightly higher to reflect the higher cost of wind energy. Lori A.

Wisconsin Electric Power Co., outbid about 60 companies to supply electricity to Chicago's Public Housing Authority, now served by Commonwealth Edison Co., which says it will refuse wheeling services. The housing authority says the deal with WEP would allow it to shave about $5 million off its $10-million, annual CE electric bill. The authority currently pays CE roughly 7.2 cents per kilowatt-hour, but would pay less than 3 cents per kWh to WEP, excluding wheeling charges. The dispute may well end up before the Federal Energy Regulatory Commission.

Lawyers for the Massachusetts Institute of Technology on Feb. 4 argued before the Massachusetts Supreme Court that their client should not be made to pay $6 million to Cambridge Electric Light Co. to cover stranded costs for building its own $50 million on-campus generating plant, as directed by the state utility commission. MIT said it would never have built the plant had it known about the fee. A ruling is expected in the spring.

The Pennsylvania Public Utility Commission has refused to issue its 1996 report card of the state's electric, telephone, natural gas and water utilities. The reports usually are issued on an annual basis to little fanfare, but with the advent of varying degrees of competition, the commissioners have disagreed over the amount of performance information that should be released.

According to an article in the Philadelphia Inquirer, the controversy began when PUC Commissioner Robert Bloom wanted sections of the report removed that could cause discomfort to some utilities.

Oklahoma State Senator Kevin Easley (D) has introduced two bills to the state Legislature. The first bill would introduce competition to the electric utility industry. The second bill would revamp the Oklahoma regulatory commission.

Senate Bill 500, the "Electric Restructuring Act," would allow some consumers to choose their electric suppliers by 1999. All consumers would be able to choose soon thereafter. The measure also calls for the Oklahoma Tax Commission to assess the impact of restructuring on state tax revenues and the feasibility of establishing a uniform consumption tax.

The New York Public Service Commission on Feb. 12 pushed toward competition by approving a multi-utility pilot program for electric retail access for commercial farms and food processors, and by allowing utilities to use their flexible-rate programs to compete against economic-development power offered by the New York Power Authority (Docket 97012/94EO385).

The Dairylea farming cooperative had asked the commission to approve a pilot open to commercial farms and food processors, except those that already have flexible rate contracts. The PSC agreed.

North Carolina and South Carolina, both relatively low-cost power states, recently have made moves toward competition. In North Carolina, bills calling for the formation of a study commission to examine the introduction of electric supplier choice in that state were introduced in the House (H.B. 12) and Senate (S.B. 38). The intent to introduce choice has prompted the North Carolina Coalition for Customer Choice in Electricity to call on legislators to develop a report by April 1998, in time for a bill to be considered by the General Assembly that same year.