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Fortnightly Magazine - April 1 1995

LG&E to Buy Hadson Corp.

W. Lynn Garner

LG&E Energy Corp. plans to reenter the natural gas marketing business by purchasing Dallas-based Hadson Corp. for $143 million. The deal includes all of Hadson's gas marketing operations, including 1,300 miles of gas-gathering systems, gas transmission systems, and gas processing and storage systems. Hadson's operations are located primarily in New Mexico, West Texas, Oklahoma, and Montana.

The two companies reached a definitive agreement, but the sale is subject to regulatory approval. The agreement marks LG&E Energy's second venture into natural gas marketing.

N.J. Utilities Must Market Test Power Proposals

Phillip S. Cross

The New Jersey Board of Public Utilities (BPU) has announced an interim policy requiring electric utilities to "market test" all proposals for new capacity additions. The requirement grew out of a highly contentious proceeding involving a failed proposal by Jersey Central Power & Light Co. to purchase an interest in generating facilities from Duquesne Power & Light Co. in Pennsylvania and to construct major transmission facilities.

Consumers Power Targets "At-Risk" Customers

W. Lynn Garner

Consumers Power Co. has asked the Michigan Public Service Commission to approve a Special Competitive Service (SCS) rate to help retain industrial customers who threaten to leave the system. The SCS rate would be offered to customers who can obtain their power elsewhere and to new customers considering locating or expanding facilities in Michigan. "[A]pproval of this rate would grant Consumers Power the ability to negotiate special contracts with certain `at risk' large industrial customers which have competitive energy supply options," says Michael G.

Muni Competition Gets Utility Discount

Phillip S. Cross

The Illinois Commerce Commission (ICC) has approved special discount rate tariffs to help Illinois Power Co., an electric utility, meet ongoing competition from municipal electric utilities within its service territory.

Northern Border Plans Expansion

W. Lynn Garner

Northern Border Pipeline Co. has filed for federal approval to extend its pipeline system 218 miles deeper into the Midwest, at a cost of $370 million. Sponsors say the project could be in service by November 1997.

IntraLATA Competition Advances in Kentucky

Phillip S. Cross

The Kentucky Public Service Commission (PSC) has moved closer to full competition in the telecommunications intraLATA market by approving an implementation schedule, monitoring rules, and cost-recovery methods for intraLATA equal access. It had established the equal access, or "dialing parity," goal in a 1991 order on competition in the telephone market.

Mass. Utilities Settle Stranded Investment Issues

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has accepted a settlement agreement between Massachusetts Electric Co. (ME), the Massachusetts Bay Transportation Authority (MBTA), and Boston Edison Co., which decides stranded investment and wheeling issues arising from ME's loss of MBTA as a retail customer (Docket No. ER94-129-000). The case arose in 1991, when the Massachusetts legislature designated MBTA a "domestic electric utility," allowing MBTA to leave ME. MBTA then signed a wholesale supply agreement with Boston Edison.

California Denies Rehearing on IntraLATA Competition

Phillip S. Cross

The California Public Utilities Commission (CPUC) has denied applications for rehearing and a request for a stay of its recent decision to expand intraLATA competition and redesign rates for local exchange carriers to prevent revenue losses and ensure the proper pricing of bundled competitive services. Re Alternative Regulatory Frameworks for Local Exchange Carriers, I.87-11-033; Application Nos. 85-01-034 et al., Decision 95-01-047, Jan 24., 1995 (Cal.P.U.C.). t

Phillip S. Cross is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

49

Perspective

Patricia M. Eckhert

We stand on the threshold of a new era in the electric services industry. I deliberately avoid the term "electric utility industry," because the future is not limited to the vertically integrated monopoly utility. Many utilities may already perceive the first cracks in their armor: nonutility generators (NUGs), self-generators, and energy service companies.

Competition is not in the industry's future; it is here now. Further, competition and market forces are not going to magically disappear.

Telecom Reform: New Congress, New Bill

Lori A. Burkhart

Here we go again. Last year, the 103rd Congress failed to pass the much-promised and highly touted telecommunications reform legislation aimed at bringing the antiquated Communications Act of 1934 into the 21st century. Now it's up to the 104th Congress, and both parties have draft legislation ready to go.

In February, Sen.

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