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Fortnightly Magazine - August 1995

Michigan Gets Retail Wheeling Rates

Lori A. Burkhart

The Michigan Public Service Commission (PSC) has set rates and charges for delivery service for a five-year experimental retail wheeling program involving Detroit Edison Co. (DE) and Consumers Power Co. (CP). The program will be implemented the next time the utilities solicit new capacity (Case No. U-10143/10176). The ruling follows an April 11, 1994, PSC order approving the framework for the retail wheeling experiment. The rates pertain to industrial customers with 5 megawatts of retail delivery capacity that use about 3 million kilowatt-hours (Kwh) of electricity per month.

Nuclear Storage at Issue iin Minnesota Decommissioning Case

Phillip S. Cross

The Minnesota Public Utilities Commission (PUC) has reaffirmed an earlier decision

allotting another

14.8 years of service to two Prairie Island nuclear units owned by Northern States Power Co. The PUC turned back claims that it should shorten the remaining life estimate because the utility might be unable to secure offsite storage for spent fuel from the plant.

UPA Tries to Snag LILCO

Lori A. Burkhart

The Long Island Power Authority (LIPA) plans to acquire the Long Island Lighting Co. (LILCO), to help reduce LILCO's high electric rates and improve Long Island's economy. To that end, LIPA has formed a public/private partnership with a private utility company that will provide extensive management services for LILCO. The utility partner has agreed to invest $100 million in the acquisition, contingent upon Gov. Pataki's approval. LIPA would create a subsidiary to acquire LILCO using tax-exempt bonds.

New Jersey Approves Gas to Electric Pricing

Phillip S. Cross

The New Jersey Board of Public Utilities (BPU) has approved a change in the method used by Public Service Electric and Gas Co. to determine the price of gas paid by its electric division to its gas division for volumes needed to generate electricity. The new method adds two types of service beyond the current all-interruptible classification. The new "dedicated" volumes will only be subject to interruption at temperatures of 20 degrees or below. In addition, demand charges will be estimated based on monthly volumes rather than fixed historical annual volumes.

PSI Energy Offers Customer Choice

Lori A. Burkhart

PSI Energy has filed a proposed tariff with the Indiana Utility Regulatory Commission (URC) that would allow new and expanding businesses in its service territory to choose their power supplier if their electric use increases to two megawatts or more. PSI said the tariff would give qualifying businesses access to the national electric market. It expects the URC to decide by the spring of 1996.

Arkansas Approves Fuel Clause Treatment for Test Energy

Phillip S. Cross

According to the Arkansas Public Service Commission (PSC), the Arkansas Electric Cooperative Corp treated ratepayers fairly when it used its fuel adjustment clause to recover the value of test energy produced at one of its hydroelectric facilities. The PSC rejected a claim by its staff that the recovery was misplaced because no fuel costs were actually incurred for generating the test energy. The PSC said the co-op deserved a credit for the value of the energy because the value of the hydroelectric plant would be reduced by the same amount under the approved accounting treatment.

Wisconsin Aims for Municipal Tax Fairness

Lori A. Burkhart

The Wisconsin Public Service Commission (PSC) has initiated a rulemaking to introduce an alternative method of calculating the tax equivalent for municipal utilities. The tax equivalent is calculated annually and represents the amount of money a municipal utility pays directly into the municipality's general fund. The rulemaking responds to concerns that the tax equivalent was excessive when compared to the gross receipts taxes paid by investor-owned utilities.

Mass. Requires Innovative Financing for Water Plant

Phillip S. Cross

The Massachusetts Department of Public Utilities (DPU) has granted preliminary approval to a water utility's proposal to "project finance" the cost of a new treatment facility required to comply with federal and state laws. The utility, Massachusetts-American Water Co., had proposed forming a special purpose corporation solely to finance the plant. The new corporation would lease the facility to the utility, using the payments to repay tax-exempt bonds issued under the financing plan.

HLP Tariff Must Recover Marginal Cost

Lori A. Burkhart

By a 2-1 vote, the Texas Public Utilities Commission (PUC) has placed a condition on approval of Houston Lighting and Power's (HLP) experimental tariff for special contract pricing (Rate Schedule SCP) with industrial customers whose electric power needs are or can be served by alternative sources of power: The floor of the rates must be designed to recover marginal costs (Docket No. 12957). The order on rehearing affirmed an earlier PUC decision shortening the term of the contracts from the proposed 7 to 10 years to 5 to 10 years.

NPPA Proposes Single Operator Transmission System

Lori A. Burkhart

The New York Power Authority (NYPA) favors restructuring opportunities consistent with a statewide,

single-operator transmission system. Their proposed model, submitted to the New York Public Service Commission (PSC) as part of the "Competitive Opportunities" proceeding, envisions an independent system operator that would own and operate all transmission facilities in the state. Alternatively, NYPA would agree to a consortium in which owners cede their facilities to a single operating entity via a contractual relationship.

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