In a case involving San Diego Gas & Electric Co. (SDG&E), the California Public Utilities Commission (CPUC) has OK'd new guidelines for preapproved contracts designed to obtain, attract, or retain new electric customers. The guidelines also apply to contracts designed to stem self-generation or avoid customer flight out of state.

The CPUC also will allow SDG&E to negotiate a rate discount contract with any customer, for any purpose, as long as shareholders absorb 100 percent of revenue losses and rates reflect a price floor based on customer-specific marginal cost.

A recent ruling by the New Jersey Board of Public Utilities (BPU) has directed Public Service Electric and Gas Co., to show that customers will be better off under the company's newly proposed program for alternative regulation (the "New Jersey Partners in Power Plan"), than under traditional regulation.

Nevertheless, the BPU declined to set a rate base or rate of return to establish a starting point for rates under the new proposed plan.

The North Carolina Utilities Commission (NCUC) has rejected a request by Duke Power Co. to recover as a cost of fuel some 90 percent of the price of bulk power purchased from Enron Power Marketing, Inc.

Instead, it allowed Duke to recover only 59 percent Enron purchases, the level of fuel costs Enron could verify by directly contacting the generating utilities. Nevertheless, it said it would not accept "hearsay" evidence on the share of costs attributable to fuel.

Two recent decisions from Hawaii and Michigan illustrate some of the issues now arising on the question of resale of telephone service by local exchange carriers (LECs).

In Michigan, the state public service commission has directed the state's LECs to offer all basic local exchange services for resale in a nondiscriminatory manner to competitors and affiliates at wholesale rates. It defined "wholesale rates" as retail rates less the avoided costs to the LEC.

The North Dakota Public Service Commission (PSC) has approved the Primergy merger between Northern States Power Co. and Wisconsin Energy Corp.

As an important factor in its decision, the commission noted that after the merger, Primergy plans to reduce North Dakota electric rates by 1.5 percent and gas rates by 1.25 percent, with a moratorium on increases until 2001.

asset value and return on capital, not lost revenues.

On July 3, the Pennsylvania Public Utility Commission (PUC) submitted its report to the Governor and General Assembly on retail electric competition (PUC Docket No.

I-940032).

Labor got on well with monopoly.

But now, if experience is any guide,

expect a stiff fight for benefits, jobs, and wages.

At this very moment, utility chief executive officers (CEOs) are planning for the future.

in energy service companies to boost earnings beyond the normal growth rate?Going on the "defensive-offensive."

In the early 1990s, flush with utility money from its corporate parent, Entergy Systems and Service, Inc. began expanding to provide competitive energy services.

What to Do With All that CASH?Seeing no need to build, utility managers are looking

to invest. Can they be trusted

with stockholder money?With little of the fanfare that surrounds the debate on utility competition, robust cash flows and declining capital outlays have created forces that will reshape the industry no matter how competitive restructuring unfolds. Cash generation already exceeds investment in core utility activities, and the differential will grow sharply over the next several years.

Two Companies,

Two StrategiesThe question is whether to own or lease,

but each route offers its own advantages.

With deregulation nipping at their heels, utilities are looking for ways to gain and maintain

customers. Aggressive utilities are seeking new customers outside of their service territories and offering competitive prices, new products, and new services.