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Fortnightly Magazine - January 15 1995

Consumers Power Calls for End to Rate Subsidies

W. Lynn Garner

Commercial and industrial customers of Consumers Power Co. paid almost $500 million above their actual cost of service to subsidize residential customers over the past five years, claims John W. Clark, Consumers Power senior vice president. "The current subsidy of residential electric rates by Michigan industry is shortsighted and costs Michigan jobs," he told a business roundtable in Detroit.

Oregon Rejects New "Buy vs. Build" Incentives

Phillip S. Cross

While investigating the "build versus buy" issue, the Oregon Public Utility Commission (PUC) has upheld its existing least-cost planning and competitive-bidding regulations. The PUC rejected proposals to alter its existing integrated resource planning process by adding "market-test" or shared-cost-savings incentive regulation. Proponents said that the proposals were necessary to counteract a tendency by utility management to favor construction to boost rate base.

Florida Approves To Usher Test for DSM

By Phillip S. Cross

In setting utility conservation goals, the Florida Public Service Commission (PSC) has decided to permit the state's electric utilities to eliminate demand-side management (DSM) programs that increase rates for nonparticipating customers.

Westinghouse Cleared in Nuclear Reactor Case

Lori A. Burkhart

On December 6, the jury in a three-month-old trial found that Westinghouse Electric did not engage in fraud by supplying two nuclear reactors with allegedly faulty steam generators to Duquesne Light Co. and four co-owners of the Beaver Valley I and II nuclear plants. The utilities had sought $350 million in compensatory damages, and originally charged Westinghouse with RICO violations, breach of contract and warranty, as well as fraud. But in October, U.S.

California Fines Cellular Firms

Phillip S. Cross

Four facilities-based cellular telecommunications companies will pay fines totalling $5.52 million following a California Public Utilities Commission (CPUC) investigation of compliance with its cellular tower siting regulations. The four firms (em Los Angeles Cellular Telephone Co., Mountain Cellular, GTE Mobilnet of California, and Bay Area Cellular (em had either failed to file applications for siting approval with the CPUC prior to construction or failed to obtain proper permits for construction from other governmental agencies.

Wisconisn Orders LDCs to Restructure Rates

By Phillip S. Cross

Gas local distribution companies (LDCs) in Wisconsin must provide unbundled balancing services for transportation customers at cost-based rates under new rules adopted by state regulators. The new rules came out of a Wisconsin Public Service Commission (PSC) investigation of LDC tariff changes required as a result of pipeline restructuring at the federal level.

The PSC ruled that balancing is required where an LDC is served by a pipeline with balancing provisions that contain penalties that default to the LDC, and hence to system sales customers.

TransCanada Adopts Poison Pill

Lori A. Burkhart

TransCanada PipeLines Ltd. has adopted a plan to encourage fair treatment of shareholders in event of a takeover offer. The plan addresses concerns that existing Canadian law does not allow enough time for the board or shareholders to properly consider a takeover bid. Under the plan, shareholder rights can only be exercised when a person announces the intention to acquire 20 percent or more of TransCanada's common shares without complying with the "permitted bid" provisions of the rights plan.

Rate Discounts Pave the Way for Restructuring

Phillip S. Cross

Much attention has been paid to revolutionary rate-reform plans advanced to meet perceived competition in energy markets. So much, in fact, that the increasing popularity of the special discount rate has gone virtually unnoticed.

New York Reviews QF Backup Service

By Phillip S. Cross

The New York Public Service Commission (PSC) has turned down a request to create a special rate for backup service to qualifying facilities (QFs) with dispatchable contracts. The PSC made the ruling while reviewing a request by Niagara Mohawk Power Corp. for permission to increase its rates for backup services provided to customers with onsite generation, primarily QFs. The utility had withdrawn the proposed rates, but only after the parties to the case claimed that the rate proposal was designed to kill competition, especially from smaller QF projects.

FERC's Santa Visits Canadian - Northeast

Lori A. Burkhart

At a November 11 conference, "Canadian-Northeast Energy Trade: New Issues and Challenges," sponsored by the New England-Canada Business Council, Commissioner Donald F. Santa, Jr.

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