[BETA] Fortnightly

The Maine Public Utilities Commission (PUC) has terminated an ongoing rulemaking on stranded-cost recovery by electric utilities in the state. In closing the docket, the PUC cited proposed rules recently issued by the Federal Energy Regulatory Commission (FERC) as evidence of FERC jurisdiction in the matter. The PUC noted that it had carefully drafted its own stranded investment case to avoid jurisdictional conflicts (em by limiting its proposed rule to the recovery of costs incurred to serve retail customers, and by employing an exit-fee recovery mechanism rather than one involving transmission pricing and access. According to the PUC, the FERC expanded the scope of its jurisdiction over stranded costs to encompass retail facilities, finding "a nexus between the availability of wholesale transmission and the stranding of costs when a retail customer becomes a wholesale customer through municipalization." While stating that it did "not necessarily agree with the FERC's jurisdictional analysis," the PUC concluded that continuing the case was impractical. Re Recovery of Stranded Costs, Docket No. 95-055, Apr. 18, 1995 (Me.P.U.C.).

In another case, however, the PUC has rejected federal preemption, giving itself jurisdiction to review a proposed wholesale electric power transaction between two utilities in the state. The contract calls for Central Maine Power Co. (CMP) to provide firm-requirements service to Houlton Water Co. CMP will provide the service primarily through Aroostook Valley Energy Co., a CMP affiliate. Houlton Water is connected with Maine Public Service Co., another of the state's certificated electric utilities.

The PUC said state law required investigation of the need for the Houlton power purchase, and that it was only preempted under federal law from reviewing the rates contained in the contract. It refused, however, to broaden its review to consider the effect of the sale on Maine Public Service Co. and its ratepayers. According to the PUC, a broad examination of the effect of power purchases on the state as a whole would interfere with the FERC's power to encourage a free and active interstate wholesale market. In a separate dissenting opinion, Commissioner Hughes concluded that the PUC was preempted from examining the impact of the sale on Maine Public Service Co. because the FERC had clear jurisdiction over the issue of stranded costs at the wholesale level. Re Central Maine Power Co. et al., Docket Nos.

94-475; 94-476, Mar. 30, 1995 (Me.P.U.C.).

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