Tennessee Valley Authority

ON OCT. 31, 1997, ENTERGY CORP. AND 16 OTHER MEMBERS

announced their intention to withdraw from the Southwest Power Pool regional reliability council and join the neighboring Southeastern Electric Reliability Council. The announcement shocked the SPP and its members, plus other industry observers and stakeholders.

While significant in number, the withdrawals do not necessarily signal widespread displeasure with SPP's initiatives and performance.

MAINE YANKEE PRUDENCE. The Maine Public Utilities

Commission will investigate the prudence of Maine Yankee Atomic Power Co.'s decision to close its nuclear plant permanently.

The PUC said Oct. 22 that unrecovered investment in Maine Yankee combined with the loss in plant value could cause additional stranded assets for plant owners Central Maine Power Co., Bangor Hydro-Electric Co., and Maine Public Service Co. If imprudent action is found, the PUC said it would take steps to ensure that Maine's electric ratepayers do not bear any related costs.

NO ONE KNOWS FOR SURE WHEN THE FIRST ISSUE of Public Utilities Fortnightly went to press. Choose any of several dates - 1915, 1921, 1928 or 1929 - and you wouldn't be far off the mark.

The ancestor of the Fortnightly, known as Public Utilities Reports, began printing in 1915 - not as a magazine per se, but as a compilation of the text of early rate orders from public utility commissions. Annotations and commentary first appeared in 1921.

USE OF U.S. ECONOMY UPHELD FOR EQUITY CALCULATIONS

The Federal Energy Regulatory Commission, in seven rate cases involving interstate natural gas pipelines, has upheld a new policy on the appropriate long-term growth rate to be used in computing their return on equity. Five of the pipelines contested FERC's new policy, as announced in Opinion 396-b.

The Commission defended the rate-setting method, but decided to allow the pipelines a chance to prove why the rules should not apply to them. The contesting pipelines are: Trailblazer Pipeline Co. (Docket No.

The House and Senate conference committee working on energy appropriations decided to cut funding for the Tennessee Valley Authority, then end it after 1998.

The Senate had proposed giving TVA $86 billion to fund nonenergy programs such as flood control and environmental programs (em $20 billion less than the amount proposed by the Clinton Administration. The House held out for less, agreeing to fund $70 million in 1998.

TVA Chair Craven Crowell said the $70 million, along with "carryover funds" from 1997, will allow TVA to meet its obligations.

Investor-owned utilities serving the Southeast U.S. are well-positioned to face increasing competition, but the region's municipal joint power agencies and electric co-ops may face serious losses.

That's the finding of a Moody's Investors Service regional study, the fourth in a series.

The "Southeast Electric Break-Even Analysis" estimates $24 billion in stranded costs for the region, with cooperatives and JPAs holding a disproportionately high portion of the per-kilowatt costs.

The board of the California ISO selected Jeffrey D. Tranen as its first CEO. Tranen is former president of the New England Power Co., senior v.p. of the New England Electric System and chair of NEPOOL. The ISO starts operation Jan. 1, 1998.

Charles F. Gay, Ph.D., former director of the DOE's National Renewable Energy Laboratory, was hired as president and CEO of ASE Americas Inc. Klaus Albrecht, former president and CEO, will serve on ASE's board and as senior v.p.-business development.

Five utilities suing the Tennessee Valley Authority for allegedly making electric sales to unauthorized third parties for resale outside its service territory have agreed to a joint settlement.

The settlement calls for TVA only to sell or deliver power to authorized exchange power companies. TVA agreed not to knowingly enter any exchange power transactions if the purchaser buys that power intending to resell it at wholesale to an unauthorized entity. TVA will reiterate its contract requirements with its exchange power companies.

The Northwest Power Planning Council is accepting comments on a revision of its Fourth Northwest Power Plan through Oct. 31. The plan is the latest created by the council since 1983. It reviews industry developments in generation, conservation, gas and electric. It also examines institutions created in response to increasing competition and policy evolution. The draft reflects recommendations of the Comprehensive Review of the Northwest Energy System and suggests ways to carry out many of those recommendations. For a copy (Document 97-11), call (800) 222-3355.

The Tennessee Valley Authority has unveiled a 10-year business plan that includes a 50-percent debt reduction and a 15-percent reduction in the total cost of power by 2007.

"Our goals for 2007 are to reduce the wholesale cost of power from the current 4.11 cents per kilowatt-hour to 3.46 cents, slash TVA's debt in half to $13.8 billion and respond to changing customer needs," said TVA CFO David Smith.

The Ten Year Business Outlook recommends a price increase in 1998 (em its first in 10 years (em which should boost TVA's revenues 5.5 percent.