federal-state tensions currently affecting energy regulatory policy in America.
Sen.
The Securities and Exchange Commission's Division of Investment Management has proposed repeal of the Public Utility Holding Company Act of 1935 (PUHCA), with consumer safeguards preserved and transferred to the Federal Energy Regulatory Commission (FERC). Safeguards would include state access to holding company books and records, federal audit authority, and oversight of affiliate transactions.
(R-CA) in a letter attacking the Federal Energy Regulatory Commission's (FERC's) February 22 decision that the California Public Utility Commission's resource auction violated the Public Utility Regulatory Policies Act in failing to consider all sources in setting avoided costs. The letter opposes what it labels the FERC's attempt to overturn California's Biennial Resource Plan Update (BRPU).
rolled-in pricing for new pipeline facilities where the benefits to the system are proportionate to the rate impact on existing customers (Docket No. PL94-4-000). In the past, the FERC made cost-recovery pricing decisions during the first rate case after the facilities were constructed. Now, the FERC will make its determination when the certificate is issued.
On May 31, the Gas Industry Standards Board (GISB) circulated for industry review and comment proposed electronic standards for capacity release. The proposed standards are based on the work of the Federal Energy Regulatory Commission (FERC) electronic bulletin board (EBB) working group, and include those formally adopted by the FERC in Order 563. GISB added easy implementation methods and expanded the definitions of the information requirements. It also included enhancements that the FERC EBB working group plans to file for FERC review in the near future.
Tennessee Valley Authority (TVA) chief operating officer
Joe Dickey is displeased with a General Accounting Office (GAO) report advocating a 10-percent rate hike for TVA. Dickey says that TVA has held rates steady for eight straight years and plans to hold them stable for at least another two. He notes that the report focuses on the past and suggests privatizing TVA as an option. Dickey adds that the GAO criticizes TVA cost,s but ignores that TVA has cut its workforce by half since 1988 and its costs by $800 million.
The Federal Energy Regulatory Commission (FERC) has approved the proposed merger of Midwest Power Systems, Inc. and Iowa-Illinois Gas and Electric Co. to form MidAmerican Energy Co. as consistent with the public interest (Docket No. EC95-4-000).
The City of Independence, MO, asked the FERC to condition the merger on MidAmerican providing some form of protection against merger-related rate increases, but the FERC found no evidence that costs would increase as a result of the merger.
Commission (CPUC) moved a tortured step closer to deciding how it will reform its regulation of the
state's electric utilities when it
adopted a Proposed Policy Decision in its proceeding on competition by a 3-to-1 vote on May 24. The Proposed Decision retreats from the free-market approach the CPUC took when it presented its "Blue Book" proposal in April 1994.
The Pennsylvania Public Utility Commission (PUC) has reaffirmed earlier rulings establishing performance-based rate mechanisms for Columbia Gas of Pennsylvania, Inc., citing its authority to implement modified versions of a capacity-release sharing mechanism and an incentive mechanism for purchased gas costs.
Up until now, cost-of-service ratemaking has provided relatively stable rates, while enabling utilities to attract enormous amounts of capital. Of late, however, regulators appear to be heeding the argument that changing markets warrant a second look.