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Fortnightly Magazine - October 1 1995

Demand-side Management: Mitigate, Don't Eliminate

Jeremy Levin

Electric utilities nationwide are attempting to retreat from commitments to energy efficiency (em a retreat that will benefit few customers, while damaging many. This retreat is driven by fear of retail wheeling (em that consumers will be able to shop for the lowest prices among competing entities. In turn, the threat of retail wheeling has spurred utilities to a frantic scramble to cut costs and trim rates.

Electric Industry Restructuring: The States Forge Ahead

Brian Gish

About 30 states have begun (em

either through the legislature, the utility commission, informal working groups, or some combination of these (em to consider issues such as retail wheeling, unbundled utility structures, and alternative rate regulation.1 California's "Blue Book" hearings have drawn the most attention, but significant efforts are also underway elsewhere. Although each state is approaching the issue in its own way, successful industry restructuring will ultimately require coordination across state lines.

California DSM: A Pyrrhic Victory for Energy Efficiency?

Robert L. Bradley, Jr.

California has led the nation in utility expenditures for ratepayer-subsidized energy conservation, also called

demand-side management (DSM).1

With broad-based support from utilities, consumer representatives, environmentalists, the California Public Utilities Commission (CPUC), and the California Energy Commission (CEC), some $1.8 billion has been spent since 1990 (and $

Ontario Faults Gas DSM Plan

Phillip S. Cross

While setting rates for Union Gas Ltd., a natural gas local distribution company (LDC), the Ontario Energy Board found the LDC's demand-side management (DSM) plan deficient and ordered shareholders to bear the cost of any required remedies. The Board found, however, that denying the DSM budget would make it harder for the LDC to accomplish energy conservation and environmental objectives and, would run contrary to the public interest.

Frontlines

Bruce W. Radford

On the morning after Labor Day, back from one last beach fling, Wall Street Journal assistant features editor Max Boot published an editorial castigating California Gov. Pete Wilson for his alleged failure to "take a stand" on electric deregulation in the Golden State ("California's Governor isn't Plugged into Deregulation Debate," Sept. 5, 1995, p. A15). "There's a leadership vacuum here," writes Boot. "Governor Wilson is partly responsible for the problem ... he appointed Mr. Fessler and the other PUC members.

Potomac Electric: Win Some, Lose Some

Phillip S. Cross

The District of Columbia Public Service Commission (PSC)

has allowed Potomac Electric Power Co. rate recovery of costs associated with the development of electric vehicles for fleet use under alternate-fuel vehicle requirements imposed under the Energy Policy Act of 1992. The PSC rejected a request by the Greater Washington Petroleum Committee, an oil industry trade group, to deny funding because electric vehicle technology had not evolved to a point that promotes consumer acceptance of a competitively priced vehicle.

People

The Interstate Natural Gas Association has appointed Terry D. Boss v.p. of environment, safety, and operations. Boss replaces Theodore L. Kinne, who has retired.

R. Paul Grady has resigned as v.p. of corporate development with UGI Corp., a holding company with utility and propane marketing subsidiaries, to become v.p. of sales and operations at its wholly-owned subsidiary AmeriGas Propane, Inc.

Western Fuels Association, Inc. has reelected the following board members: Robert L.

Ill. Approves Telecom Cost-of-Service Rules

Phillip S. Cross

The Illinois Commerce Commission approved new rules for cost-causation principles used by telecommunications carriers in setting rates for competitive and noncompetitive services. The new rules rely on long-run service

incremental-cost studies to measure the cost of providing individual services and to check for subsidies between service groups. Carriers will also be required to use an aggregate revenue approach to test pricing for competitive and noncompetitive services. Re Implementation of Section 13-507 of the Public Utilities Act, No. 92-0211, July 19, 1995 (Ill.C.C.).

Mailbag

Extraterrestrial

I appreciated Michael Gerrard's August piece, "Dodging the NIMBY Bullet: A Solution to Waste Facility Siting" (Perspective, p. 18). Waste facility siting is a subject that I consider a significant problem facing every U.S. citizen. Clearly, source reduction and recycling of waste should be and often is given priority over the construction of new disposal capacity.

Telephone Business Class Under Attack

Phillip S. Cross

The Illinois Commerce Commission (ICC) has signaled a willingness to remove the current business/residential differential from local telephone rates. While rejecting a proposal by its staff to begin the rate restructuring move in a case involving rates for a limited number of custom-calling services provided by Harrisonville Telephone Co., a small local exchange carrier, the ICC agreed that a movement toward eliminating the differential was appropriate under current pricing practices.

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