In reference to your May 15 article, "Report Finds Problems With Choice Pilot" ("Headlines," p. 16), following is the industrial customers' response to the report.
STATEMENT
On May 7, 1997, a group of large industrial consumers of electricity on the Illinois Power Co. system, referred to as the Illinois Industrial Energy Consumers, filed a response to a recently submitted report by Illinois Power Co., pertaining to the Direct Energy Access (DEAS) report.
Your editorial in the June 1, 1997 issue ("PJM's Brave New World," p. 4) provided a perceptive analysis of the Pennsylvania transmission pricing debate. As you point out, standard economics defines the value of a transmission constraint as the difference between the price of electricity on one side of the constraint and price on the other side. There can be no dispute over this statement; however, this straightforward theory is not always correctly applied.
In the case of electricity, the marginal running cost (or energy price) cannot be used to determine the value of a constraint.
Northeast Utilities has filed suit asking the Federal District Court in Hartford to declare unconstitutional a new state whistleblower law, which became effective May 27.
The utility said that while it agrees with the intent of Public Act No. 97-60, the law violates the constitutional rights of employers. The law would prevent utilities and related businesses from retaliating against an employee that goes public about alleged wrongdoing by a company. Northeast Utilities believes it denies employers a reasonable time to investigate and respond to employee complaints.
A coalition of Michigan electric utility customer groups and other entities has proposed an electric restructuring bill in lieu of the plan adopted by the Michigan Public Service Commission on June 5.
"Six months ago, many from this same group came together to point out that the commission's plan, if implemented, would be too slow, would favor the state's largest utilities and would result in few, if any, real savings for customers," said David Dornbos Sr., chair of Association of Businesses Advocating Tariff Equity.
Nearly a year and a half after passage of the federal Telecommunications Act of 1996, real competition has yet to emerge in Indiana in local telephone markets, according to a report issued by the Indiana Regulatory Commission.
Nevertheless, the U.R.C. says it anticipates making competitive choices available to local consumers in the coming months.
Orange and Rockland Utilities has expressed "extreme disappointment" with a preliminary decision issued by a judge at the New York Public Service Commission that concerns O&R's proposed electric restructuring settlement. (See, Case 96-E-0900, Opinion No. 96-12.)
On July 2, Administrative Law Judge Stewart C. Boschwitz ruled that unwillingness by O&R to divest its generation company would create potential anti-competitive situations and could hurt ratepayers.
Central Maine Power Co. has sent requests for proposals to all parties expressing an interest in purchasing the utility's generation assets, as provided for by recently enacted state legislation.
Also, Boston Edison Co. has unveiled its proposal for divesting its gas- and oil-fueled generating plants, and has submitted its divestiture plan to the Massachusetts Department of Public Utilities. The plan reflects a settlement among the utility, Massachusetts Attorney General Scott Harshbarger and the Massachusetts Division of Energy Resources.
Interest in Hydro.
Nevada Gov. Bob Miller (D) on July 17 signed into law an electric restructuring bill to bring competition to the state starting July 9, 1999.
AB 366 will split the state's utility commission into a three-member Nevada Public Utilities Commission and a three-member Transportation Service Authority. The commission would employ a rulemaking proceeding to unbundle rates, design consumer safeguards and set parameters for stranded costs.
The New Jersey Legislature has passed a utility tax reform package eliminating the gross receipts and franchise tax for electric, natural gas and telephone utilities.
The new tax system will levy a 6-percent tax on electric and gas sales, a 9-percent tax on companies selling the electric and gas and a transitional tax to be phased-out after five years. The package guarantees that municipalities will receive $745 million in aid in 1998 to make up for the lost revenues. That annual amount will climb to $755 million in 2002.
The U.S. House Commerce Committee has passed HR 629 approving an agreement by Vermont, Texas and Maine to dispose of low-level nuclear waste at a site in Texas.
The bill, if approved by the full House, would create the nation's tenth low-level waste disposal compact. The proposal already has the support of the various governors and state legislators. Vermont and Maine each would pay $25 million to ship out the low-level waste, which would include materials from nuclear utilities.
The proposed site lies in West Texas, about 90 miles east of El Paso. U.S.