The Ohio Public Utilities Commission (PUC) has OK'd final guidelines for interruptible (IT) electric service, with rules for pricing service options, returning to firm service, and obtaining replacement power so that customers can "buy through" interruptions.

The PUC stressed that new IT tariffs should not guarantee reentry to firm service prior to the expiration of a stated notice period. Utilities must use best efforts to provide replacement power in non-emergency situations and allow customers to specify a source of replacement power.

The Oklahoma Supreme Court has struck down as unconstitutional a state Commission rule that forced electric utilities that acquire a customer from a competitor to compensate the competitor for all associated costs and then pass such costs along to their own customers.

The court said the rule exceeded Commission authority by usurping the utility management function (em forbidding the utility to choose to absorb costs associated with switching customers.

The Pennsylvania Public Utility Commission (PUC) has issued a "tentative" statement identifying specific areas of state regulation that might require alteration or adjustment under the Telecommunications Act of 1996.

It emphasized that federal law appears to preempt its authority to restrict market entry on public interest grounds, but at the same time will impose "far-reaching" responsibilities regarding interconnection and universal service, plus activities "in areas and functions previously unknown to this Commission."

Among other things, it suggested converting al

The Wisconsin Public Service Commission (PSC) has completed its mandated annual review under a price-cap plan elected in 1994 by Wisconsin Bell, Inc., saying the company must reduce rates for intraLATA message telecommunications service (MTS) under the price-cap formula.

The Idaho Public Utilities Commission (PUC) has reversed a series of earlier rulings and has now allowed U S WEST Communications, Inc. to sell certain rural telephone exchanges to small independent local telephone carriers. Putting aside prior concerns that excessive sales prices would impose higher rates, the PUC found that projections of the ratio of purchase price to net book value had been overstated. It said the ratio had improved with recent increases in plant investment, as well as from a plan by U S WEST to contribute funds to replace switches in the sale exchanges.

Regulators in Minnesota and Pennsylvania have approved electric service tariffs with real-time pricing (RTP). In Minnesota, the PUC directed Otter Tail Power Co. to offer large-volume customers: 1) a customer-specific baseline load priced at a standard rate, with deviations priced hourly at the spot market, reflecting a profit margin plus marginal operating and outage costs; and 2) a simplified offer that eliminates the baseline calculation, increases fixed charges, and bills all energy use at the real-time incremental rate.

Long-distance telephone rates for U.S. businesses dropped 7.9 percent from February 1995 to February 1996, according to the International Telecommunications Price Survey, released by National Utility Service, Inc. on April 16. At the same time, local calling rates decreased by only 1.5 percent.

The prospect of deregulation has induced a wave of mergers among electric utilities. Most of these mergers would fail an antitrust review because, by combining generation assets of interconnected utilities, they have substantially reduced potential competition in generation.

So the Federal Energy Regulatory Commission (FERC) won't break up the electric utility industry. But it may happen anyway (em if not at the FERC's direction, then perhaps under pressure from state regulators who, some say, are threatening to link stranded-cost recovery to vertical disaggregation.

What would a breakup mean for bonds and bondholders?

As we reported last month ("New Corporate Structures Place Bondholders at Risk," May 1, 1996, p.