The North Carolina Utilities Commission (NCUC) has approved price-cap regulation plans for four major telecommunications local exchange carriers (LECs) in the state: BellSouth Telecommunications Inc. (BellSouth), Carolina Telephone and Telegraph Co. (Carolina), Central Telephone Co. (Central), and GTE South, Inc. (GTE). The NCUC rejected allegations by AT&T Communications of the Southern States, Inc., an interexchange carrier (IXC), that a separate "general rate case" was needed to gauge how the shift to price regulation affected LEC earnings.

The U.S. Court of Appeals for the District of Columbia Circuit has upheld a Federal Energy Regulatory Commission (FERC) ruling that permits Yankee Atomic Electric Co. to recover all costs associated with an abandoned nuclear plant.

In 1992, the utility decided to shut down its nuclear facility in Rowe, MA, after investigating safety concerns raised by the Nuclear Regulatory Commission.

The New York Public Service Commission (PSC) will permit Long Island Lighting Co. (LILCO), a natural gas local distribution company (LDC), to institute temporarily a series of tariff revisions designed to enhance customers' ability to choose competing suppliers of natural gas.

According to PSC staff, the LDC's plan to offer a new array of firm transportation choices constitutes a "reasonable alternative" to full disaggregation of existing sales rates.

The restructuring debate in the electric industry has focused on nuclear assets at risk for "stranding" under deregulation, while another issue has largely eluded public scrutiny: accumulated deferred federal income taxes (ADFITs). ADFITs represent money that utilities have received from ratepayers to cover federal tax expenses not yet actually recognized and paid.

Sound bites from state and federal regulators.

Offsystem Gas Sales. Florida permits new LDC tariff for sales to offsystem customers. LDC recovers all variable costs, including $100 administrative charge per transaction; splits nongas charges with firm customers, crediting administrative charges to PGA rate. Docket No. 960185-GU, PSC-96-0482-FOF-GU, Apr. 5, 1996 (Fl.P.S.C.).

Master Metering.

Many executives of publicly held utility corporations have written severance agreements to protect them in the event of a change in control. However, these severance packages remain vulnerable to attack by acquirers.

Two separate threats are emerging. One involves a direct attack on drafting flaws in the plan documents. The other, more subtle, threat lies in the impact and interpretation of the special "Golden Parachute" rules under the Internal Revenue Code. This second threat warrants attention.

natural gas pipelines (Docket No. RM96-1-000). The rule would adopt the 140 standards recently filed by the Gas Industry Standards Board (GISB).

The proposal calls for a standard Internet connection between pipelines and customers, to eliminate the disparity in procedures and interfaces that have caused confusion to date.

"This is not an intent to strip away consumer protection," Sen. Alfonse M.

D'Amato (R-NY) told

a Senate panel about S. 1317, a bipartisan bill to repeal the Public Utility Holding Company Act (PUHCA).

D'Amato, chair of the Senate Banking, Housing and Urban Affairs Committee, received nods from federal and state regulators at the June 6 hearing, although each voiced reservations. Three utility chiefs spoke in favor of the legislation.

Consumer advocates took the opposite tack.

The Federal Energy Regulatory Commission (FERC) has issued its rehearing order for Great Lakes Gas Transmission Ltd. Partnership (GLGT), upholding its July 26, 1995, order allowing GLGT to roll in the costs of expanding its natural gas pipeline facilities (Docket Nos. RP91-143-030 et al.).

The July 26 order was issued on remand from the U.S. Court of Appeals for the D.C. Circuit, reversing a 1991 order allowing incremental pricing. The case arose when GLGT spent over $700 million to expand its pipeline system.

It's as significant for what it does not do as for what it does.

Order 888 marks a significant, yet limited, step in deregulating the U.S. electricity supply industry. Most important, for utility shareholders, the Federal Energy Regulatory Commission (FERC) has now apparently established a right to recover costs prudently incurred under the old regulatory compact (if not contract) that may become stranded by the Order. But (em and this is an important but (em the FERC is not going to hand out the money easily.