Through two orders issued on June 11, the Federal Energy Regulatory Commission has set policy on return on equity for interstate natural gas pipelines (em specifically, the component of long-term dividend growth in the discounted cash flow model.

In both cases, the FERC applied the long-run growth rate of the economy, as measured by the U.S. gross domestic product. (See, Re Northwest Pipeline Corp. Opinion No. 396-B, Docket Nos. RP93-5-025 and RP93-96-005; Re Williston Basin Interstate Pipeline Co., Docket Nos.

Nine members of the Pennsylvania-New Jersey-Maryland Power Pool filed a revised plan at the Federal Energy Regulatory Commission to establish an independent system operator for the Mid-Atlantic power market.

The utilities have been battling with lone dissenter PECO Energy over the details of the ISO.

The nine utilities, dubbed the "supporting companies," agree on the form that an ISO should take. In November 1996, the FERC had rejected ISO proposals by both parties as having failed to comply with Order 888.

The Federal Energy Regulatory Commission has approved a request by KN Energy Inc. to convert its 900-mile Pony Express Pipeline from oil to natural gas (Docket No. CP96-477-000). The pipeline was expected to begin operating in August, carrying natural gas from several points in the Rocky Mountains to Kansas City.

Through a separate regulatory authority, subsidiary KN Interstate will construct a 36-mile Riverside lateral to the Kansas City market. The FERC approved rolled-in rate treatment for the pipeline.

The project garnered praise from the FERC.

Two California watchdog groups, The Utility Reform Network and Utility Consumers Action Network, have filed a joint protest at the Federal Energy Regulatory Commission against the proposed structure of California's independent system operator and power exchange (Docket Nos. EC96-19-003 and ER96-1663-003).

The groups believe the proposed structures would hurt small consumers. They noted that although small consumers use about one-third of the state's electricity, they only have two votes out of 26 in both the PX and the ISO.

The Federal Energy Regulatory Commission on June 11 approved the request of CSW Power Marketing Inc. to sell energy at market-based rates due to lack of market dominance.

The FERC in May 1996 had denied an application by CSW, an affiliate of Central and South West Corp., to sell power at market-based rates (Docket Nos. ER97-1238-000 and ER96-1348-001). The approval was based on lack of a comparable, open-access transmission tariff on the systems of CSW's public utility affiliates.

Pocketbook issues, like all others, tend to split along political lines.

Meeting on June 12, Sen. Frank Murkowski (R-Alaska) and members of the Senate Energy and Natural Resources Committee focused for the first time on what customers really think about choosing their own energy vendor.

Nevertheless, despite the shift toward pocketbook issues, and away from so-called "inside-the-Beltway" concerns, the testimony came largely from organized consumer groups, and it appeared split down political lines: urban vs. rural, private vs. public, business vs. residential.

Canadian markets beckon U.S. utilities, and vice versa, demanding greater access to transmission lines to bridge the gap.

When I took the job of president of Niagara Mohawk Power Corp., way up North, near the Canadian border, I shared the news with a close friend. I told him how excited I was to be joining an innovative team that was out in front, breaking new ground in the competitive arenas rapidly evolving in the electric power industry.

Putting aside calls for a faster-paced switch to the new industry format, the Michigan Public Service Commission has adopted a phase-in schedule for customer direct access to alternative electricity suppliers that runs through 2002. The order, which some have said needs additional work, also outlines stranded cost recovery policies and related securitization strategies.

Under the plan, 2.5 percent of each electric utility's retail load will become eligible for customer choice each year from 1997 through 2001, with all customers eligible in 2002.

The California Public Utilities Commission has established guidelines for the recovery of stranded costs over four years through a competition transition charge collected from existing and future customers, including those who depart the system.

The June 11 order allows recovery from 1998 through 2002 for costs associated with generation plants, nuclear settlements and QF contracts (Docket No. R.94-04-031/I.94-04-032). Costs associated with purchased power contracts, including QF contracts in place on Dec. 21, 1995, can be collected for the duration of the contract.

Moody's Investors Service examines key credit considerations in the evolving independent power production industry in a new report. The report predicts greater polarity in ratings of such companies.

The Haves and the Have-Nots: Access to Capital, Diversified Portfolios says the IPP industry will become dominated by "first-tier" companies that exhibit financial flexibility needed to survive in an increasingly uncertain environment. Such companies will possess diversified assets and ability to generate cash.