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Fortnightly Magazine - February 15 1996

Trends

Kent S. Knutson

Gas Garners

Big Share of '95 Fuel Mix

For the second year in a row, natural gas fueled an increasing share of U.S. electric generation. When the final numbers are tabulated for 1995, electric generation is expected to have increased about 2.7 percent over the previous year. This compares to a 0.98-percent increase for the 1993-1994 period. Gas accounted for over 10 percent of the 1995 utility fuel mix (em up from 8.8 percent just two years ago.

Wisc. Adopts Code of Conduct for LDC Marketing Affiliates

Phillip S. Cross

The Wisconsin Public Service Commission (PSC) has approved an affiliated interest agreement between Madison Gas & Electric Co., a natural gas local distribution company (LDC), and its subsidiary Great Lakes Energy Corp., an energy marketer, to reflect changing conditions in the retail market for natural gas. The approved agreement separates all gas procurement and sales functions, including physical separation of employees of both companies.

Joules

jü( )l, n: A unit of energy measurement equal to a watt-second.

According to a Newton-Evans Research Co. survey of 60 information system managers from gas, electric, and water utilities in more than 12 countries:

s About 45 percent of utilities surveyed plan to replace current computer systems through 1997.

s IOUs tend to spend more for information technology than their publicly operated peers: close to 3 percent of revenues.

Calif. Maintains LEV Programs

Phillip S. Cross

The California Public Utilities Commission (CPUC) has approved requests by the state's major energy utilities to maintain (and in some cases expand) funding for certain programs designed to aid in the development of low emission vehicles (LEV) and infrastructure. However, the CPUC approved less than the total requested by the state's energy utilities and stressed that ratepayer funding should not be used to support utility involvement in the competitive transportation market.

Pataki Endorses LILCO Dismantlement

Lori A. Burkhart

In response to a mandate by New York Gov. George E. Pataki, a Long Island Power Authority (LIPA) advisory team has developed a proposal to dismantle the Long Island Lighting Co. (LILCO), hoping to reduce electric rates by as much as 12 percent. In response, Moody's Investors Service has changed the direction of its review of LILCO's credit ratings from negative to uncertain.

LIPA intends to create a LIPA "wire company" that would buy LILCO's transmission and distribution assets, including some payment for the Shoreham plant.

LEC Gets Price-cap Plan and Service Penalty

Phillip S. Cross

While reducing rates by $5.7 million for Citizens Utility Co.

S&P Links Retail Wheeling to Revenue Decline

Lori A. Burkhart

A new Standard & Poor's (S&P) report, Direct Access Threatens Utility Revenues, predicts that electric utility revenues would decline 6 to 16 percent ($10 to $26 billion) if retail direct access is implemented. S&P bases its findings on two scenarios: In the severe case, direct access occurs immediately for all customer classes and no surcharge mechanism recovers lost revenues. The more reasonable scenario assumes that only large commercial and industrial (C/I) users will exercise their right to choose direct access and that 50 percent of C/I lost revenues will be recovered in rates.

Virginia Reviews Municipalization Threat

Phillip S. Cross

The Virginia State Corporation Commission (SCC) has stepped into the middle of a dispute between Virginia Electric and Power Co., an electric utility, and the City of Falls Church, VA. The city had planned to displace the utility as the supplier of electricity for city residents by purchasing a minimum amount of facilities from the utility and soliciting bids for power supplies outside the local system.

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.

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