To prevent a repeat of the energy emergency experienced in the state in January 1994, the Pennsylvania Public Utilities Commission (PUC) has ordered electric utilities to negotiate with their power pools, nonutility generators, and supplier utilities outside the state regarding fuel-supply reliability for plant identified as available to meet winter peak. The PUC suggested that the utilities revise rules that allow generation fueled solely by natural gas and delivered under interruptible transportation contracts to count as part of reserve capacity.

The Ohio Public Utilities Commission (PUC) has modified its natural gas transportation guidelines to allow "human needs customers" the opportunity to select alternative suppliers of backup commodity supplies. The PUC found the change had sufficient merit to enact without experimental testing and that quick authorization was necessary to develop operational details and the necessary arrangements between customers and suppliers prior to the next heating season.

Citing a "relatively stable economy," the Utah Public Service Commission (PSC) has reaffirmed its preference for a historical test period in setting utility rates. It rejected a proposal by Mountain Fuel Supply Co., a natural gas local distribution company (LDC), to employ a projected test year in its current rate case. The LDC argued that the adjusted expense and revenue figures would better reflect customer growth as well as the effects of a newly established early retirement program.

According to the Massachusetts Department of Public Utilities (DPU), electric generation is no longer best organized as a monopoly. This conclusion has led the DPU to open an inquiry to investigate: 1) how restructuring the electric industry in the state would promote competition and benefit customers, and 2) whether to extend to some or all customers the option of choosing their own supplier of electricity. Re Electric Industry Restructuring, D.P.U. 95-30, Feb. 10, 1995 (Mass.D.P.U.).

The New York Public Service Commission (PSC) has approved a proposal by New York State Electric & Gas Corp., an electric utility, to offer a new rate mechanism to retain and regain low-load-factor (5 to 35 percent) customers with viable self-generation options.

The North Carolina Utilities Commission (NCUC) has approved a series of charges levied by local exchange carriers (LECs) under their agreement with the state government to operate the North Carolina Information Highway (NCIH). The NCIH is a broadband network that

uses fiber-optic cable and advanced switching and transmission equipment to provide data, video, and imaging communications to sites throughout the state. The technology is not yet generally deployed in the public telephone network.

The Massachusetts Department of Public Utilities (DPU) has rejected challenges to an alternative price regulation plan proposed by NYNEX, a local exchange carrier (LEC). The New England Cable Television Association, Inc. had claimed that the DPU lacked authority to adopt a rate plan not tied directly to cost of service.

The structure of the utility and telecommunications industries has changed significantly since I began my role as a regulator 15 years ago. Technological developments and a competitive environment, as opposed to regulation, have provided the major catalyst for change. As a result, utility companies, which have historically enjoyed the favor of Wall Street investors, will soon face unprecedented revenue growth problems.

B. Jeanine Hull

President, Electric Generation Association

Vice President & General Counsel, LG&E Power Inc.

PURPA is not the issue; competition is. PURPA has introduced competition by demonstrating that the generation of electricity is not a natural monopoly. PURPA's faith in competition has proven itself in the form of lower-priced electricity for ratepayers. PURPA has also promoted fuel diversity by creating incentives for utilities to consider renewable fuel options for portions of their capacity needs.