State PUCs
T+D Investment Risk. The Maine PUC appeared to take a pro-consumer stance in setting principles it will use to set a revenue requirement for transmission and distribution (T&D) services provided by Bangor Hydro-Electric Co. after the company becomes a wires-only utility on March 1. The PUC downplayed the risk of wires operations, adopting a return on equity of 11 percent and disallowing about $3.5 million of some $71 million in claimed T&D costs.
State PUCs
Gas Retail Rate Design. In a move toward equalizing rates of return between customer classes, the Oregon PUC authorized Northwest Natural Gas Co. to increase base rates by nearly $246,000, at the same time boosting residential rates by 1.3 percent but lowering rates for large commercial and industrial users. It set return on equity at 10.25 percent, finding the rate "consistent with the downward trend of ROEs authorized by other regulatory commissions." Order No. 99-697, Nov. 12, 1999 (Ore.P.U.C.).
Electric Restructuring.
Mergers & Acquisitions
Joint Ventures. The Federal Trade Commission, in consultation with the Antitrust Division of the U.S. Department of Justice, issued draft antitrust guidelines for "collaborations among competitors" that will apply to a wide range of joint ventures and strategic alliances other than actual mergers.
Such collaborations would include R&D efforts, information sharing and joint efforts in marketing, distribution, sales or purchasing, plus various types of trade association activities. File No. 971201, Oct. 1, 1999 (F.T.C.), published at 64 Fed. Reg.
State PUCs
Gas Appliance Repair.
Studies & Reports
Year 2000 Readiness. On Jan. 11 the North American Electric Reliability Council (NERC) predicted a minimal effect on electric system operations from Y2K software problems. The Department of Energy, which had asked NERC to run the electric industry assessment, added that 98 percent of U.S.
State PUCs
Electric Retail Choice. The Arkansas Public Service Commission has issued its final report on electric restructuring, citing a "broad" consensus favoring competition. It predicts immediate benefits for industrial customers, but warns that residential users likely will not see any quick rate cut. The PSC saw competition as consistent with action in neighboring states:
• Oklahoma. State law mandates retail choice by July 1, 2002.
• Mississippi. PSC plan would phase-in competition from 2001 to 2004.
• Missouri.
FERC
GAS PIPELINES. Noting a move toward shorter-term contracts since Order 636, the FERC on July 29 issued an "integrated package" of reform proposals for the natural gas pipeline industry: (1) specific measures in a notice of proposed rulemaking on short-term transportation (transactions shorter than one year); plus (2) an open-ended request for comments in a broader notice of inquiry. RM98-10-000, 84 FERC ¶61,985 [NOPR]; RM98- 12-000, 84FERC ¶61,087 NOI].
Courts
ENERGY SUPPORT SERVICES. An Illinois appeals court affirmed a 1997 decision by the state commission that had denied authority to Commonwealth Edison to offer "energy support services," such as design, engineering, construction, analysis and management of electrical power equipment and energy systems. The court made this decision despite the utility's argument that no evidence existed to support the commission's finding that ComEd enjoyed a monopolist's advantage over competitors.
Connecticut Attorney General Richard Blumenthal has asked the Connecticut Department of Public Utility Control to order a one-time, 25-percent credit on bills of Connecticut Light & Power customers, claiming the threat of brownouts and blackouts has reduced service quality. That translates into about $33 million in customer credits.
Blumenthal also asked that the DPU order additional credits of the greater of $10, or 15 percent, in any month with one day of brownouts or blackouts, and $15 or 20 percent, for two days of problems.
Connecticut's proposed electric restructuring legislation, H.B. 6774, died after being dropped unexpectedly by the state Senate. Backers of restructuring legislation plan to reintroduce the bill next year when the new session begins in February 1998.
The bill would have opened markets to competition Jan. 1, 2000, coupled with a 10-percent rate cut. Under the bill, utilities would have recovered up to 65 percent of stranded costs for above-market nuclear investments and 100 percent for regulatory assets. The bill would have allowed securitization of those costs.