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Fortnightly Magazine - February 15 1996

S&P Investigates Effects of Competition

Lori A. Burkhart

Standard & Poor's (S&P) has released a survey of 90 state regulators and their opinions on electric utility deregulation, conducted by RKS Research and Consulting. S&P intends to use the survey to assess the "nonquantifiable risks and opportunities" of competition.

The study found that state regulators and staff do not fully support stranded-cost recovery through cost allocation at the state level. Regulators would prefer to share stranded costs among large customers, small commercial and residential customers, and shareholders.

Maryland Still Short on Telephone Numbers

Phillip S. Cross

Despite a 1992 decision to add a new area code to prevent the projected exhaustion of telephone numbers, the Maryland Public Service Commission (PSC) has approved a plan to provide additional numbering capacity within exchanges by requiring 10-digit dialing for all customers. Future telephone lines would be assigned a new area code under the approved plan, but no existing customers would be required to change their current telephone numbers.

N.Y. Legislature May Ease Tax Burden

Lori A. Burkhart

The New York State Senate Energy and Telecommunications Committee is holding a series of hearings on the phase-out of the gross receipts tax (GRT). Utilities in New York State have been arguing that the GRT and unwanted purchased-power contracts have driven the price of electricity up to a noncompetitive level. Testimony pointed out that, regardless of the methods used to introduce competition, New York state utilities would not be able to fairly compete with out-of-state suppliers.

Gladys L.

Arkansas Approves IntraLATA Competition

Phillip S. Cross

The Arkansas Public Service Commission (PSC) has approved a move to full competition in the telecommunication intraLATA toll market. The PSC has concluded that its earlier concerns regarding uneconomic duplication of facilities and erosion of revenues for the state's local exchange carriers (LECs) no longer justified keeping the market closed. According to the PSC, competition among interexchange carriers (IXCs) for interLATA traffic had benefited consumers by producing over 100 certificated carriers competing in price and packaging of services.

Illinois Contract Raises Wisconsin Ire

Lori A. Burkhart

A 10-year wholesale power contract between Wisconsin Electric Power Co. (WEP) and the City of Geneva, IL, is raising eyebrows in Wisconsin. The result of competitive bidding, the contract sets rates some 20 percent below what the city paid WEP under a 1985 contract. WEP will pay $1 million to Geneva for an electric substation.

Off Peak

Save a Nickel, Save a Dime

Is One Merger as Good as Another?

In late November, the Federal Energy Regulatory Commission (FERC) put off immediate approval of the proposed merger between The Washington Water Power Co. and Sierra Pacific Resources (to form "Altus"), and set the case for hearing. The reason? The FERC doubted whether the merger would achieve operational efficiencies between the two noncontiguous utilities.

Perspective

Ruth K. Kretschmer

If you attended any energy conference in the past year, even one on natural gas, I am confident that at least one panel was devoted to the restructuring of the electric industry.

Nuclear Fisticuffs: Senate Panel and DOE Go Around on Waste Storage

Joseph F. Schuler, Jr.

The Senate subcommittee funding the Department of Energy (DOE) may use a carrot-and-stick approach this year to push DOE into finding a quicker solution to the long- and short-term nuclear waste crisis. The debate to get the waste stored safely underground promises an appropriations war that could rival the federal budget skirmish.

Current law authorizes only a permanent repository, not interim storage. Utilities, however, claim they're running out of room to cache their waste.

A.G.A. Supports PUHCA Repeal

Lori A. Burkhart

The board of directors of the American Gas Association (A.G.A.) has adopted a resolution asking Congress to repeal the Public Utility Holding Company Act (PUHCA) and establishing PUHCA repeal as a high priority. A.G.A. says it will actively lobby Congress and the Clinton Administration for repeal. The association seeks to continue the tangible consumer benefits of deregulation and increased competition in the natural gas industry. The A.G.A.

Identifying Market Power in Electric Generation

Gregory J. Werden

To what extent should regulation yield to market forces in setting wholesale electric prices? The Federal Energy Regulatory Commission (FERC) posed this question when it sought comments on whether open transmission access would eliminate the need for anything like traditional rate regulation.

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