The Federal Energy Regulatory Commission set a hearing for a proposal by New England Power Co. to divest its generating assets and add a termination charge reflecting generation costs that will be stranded due to early service termination.

This move, made on Jan. 29, marks the first time the FERC will consider a case-specific proposal for dealing with stranded costs in the context of corporate restructuring proposals, as allowed by Order 888 (Docket No. ER96-2367).

The Federal Energy Regulatory Commission allowed Ensource, a subsidiary of Pacific Enterprises, to cancel its authorization to engage in power marketing activities at market-based rates.

Intervenors protested that Ensource pursued the cancellation as a tactical maneuver to remove the proposed merger between Pacific Enterprises and Enova from FERC review. They claim that the merger applicants ultimately would resume Ensource's operations and make it part of a post-merger joint venture to market electricity, natural gas and energy-related services at market-based rates.

A national electric competition bill introduced by Senator Dale Bumpers (D-Ark.) Jan. 30 that would allow customers to choose their electric supplier by December 2003, invoked mixed reactions.

Bumpers, the highest ranking Democrat on the Senate Energy and Natural Resource Committee, said the bill would establish a uniform federal system to avoid "certain chaos," which would result from legislating different guidelines for the industry.

Chair Murkowski Chews Out an Undersecretary. At a Senate panel on a bill calling for the Department of Energy to store nuclear waste short-term, opponents stacked up objections, even renewing opposition to a permanent site.

The "Nuclear Waste Policy Act," S. 104, is similar to a bill passed in the Senate last year. It calls for

construction of temporary storage, a safe way to transport the waste, and more studies leading to a permanent site 1,200 feet below the ground at Yucca Mountain, Nevada. Already, $6 billion has helped bore an exploratory tunnel there.

FERC Gives Guidance To Foreign Affiliates. The Federal Energy Regulatory Commission on Jan. 15 denied a petition by British Columbia Power Exchange Corp. (Powerex), the power marketing affiliate of British Columbia Hydro and Canada-utility Power Authority (BC Hydro) to sell power at market-based rates.

The order marked the first time the FERC showed how it will apply Order 888's open-access requirements to foreign utility affiliates (Docket No. ER97-556-000).

"I look forward to Powerex taking another run at this issue," says Commissioner James Hoecker.

Prospects look good for cheaper, independent electrical power in Ontario. The market is forcing an end to the current impasse on energy policy. Reforms are apt to include "wholesale access," which should arrive in the province before the year is out. Otherwise, Ontario may lose jobs to neighboring provinces and states.

The Minnesota Department of Revenue and the Minnesota Department of Public Service have released a study finding that electric and natural gas utilities pay higher taxes in certain categories than in other states in the region, which could put Minnesota at a disadvantage as the utility industry becomes increasingly competitive.

The study, mandated by the 1996 state Legislature, finds that in addition to paying high real estate taxes, utilities also pay personal property taxes on machinery and equipment. However, in 1996, Gov.

A year after passage of the Telecommunications Act of 1996, more than 440 local phone markets are ripe for competition, says a new report.

According to its second Competition Report, the U.S. Telephone Association says nearly every state has open markets.

In 1995, market-share losses in high-capacity local business service were 39 percent in Philadelphia; 35 percent in Pittsburgh; 32 percent in Washington, D.C.; 27 percent in Baltimore; 39 percent in Los Angeles; 37 percent in San Francisco; 50 percent in New York City; and 37 percent in Boston.

Due to troubles at the Kewaunee nuclear power plant, the Wisconsin Public Service Commission has agreed to allow its three utility owners to accelerate depreciation based on a plant retirement in 2002 instead of 2013. It also agreed to shorten the length of time decommissioning funds can be set aside.

The plant had shut down Sept. 20, 1996, for routine repairs and was expected to open one month later when damage to steam generators was found to be greater than expected. Replacing them would cost about $100 million.

Central and South West Corp. President and CEO Dick Brooks is "extremely disappointed" with a proposed decision by an administrative law judge to increase annual revenues of its subsidiary, Central Power and Light Co., by $7.2 million. CPL in November 1995 had asked for a $71-million hike in retail rates.

A significant factor contributing to the difference is that the judge recommends reducing return on equity from 12.25 percent to 10.9 percent, which would reduce the rate increase by $30 million.