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Fortnightly Magazine - May 1 1996

Utility Workers Cautious on Restructuring

Joseph F. Schuler, Jr.

Deregulation places the cost, safety, and reliability of the U.S. electric utility industry at risk. So says the Utility Workers Union of America, AFL-CIO, which represents 50,000 workers at 74 utilities. A UWUA position paper warns that competition could cause shortages and high prices: "This is the standard business cycle.... There is no reason to believe that the laws of supply and demand have been repealed." The paper proposes 11 tenets for restructuring:

s Provide competition for all.

s Respect state control.

Arizona Rejects Holding Company Plan

Phillip S. Cross

The Arizona Corporation Commission has turned down a bid by Tucson Electric Power Co.

James River Refuses $1-Million Cut

Lori A. Burkhart

The James River Corp.'s Dixie Cup manufacturing plant in Darlington, SC, has declined a $1-million rate cut offered by Carolina Power & Light Co. Dixie Cup, which hopes to slash its electric bill by $700,000 a year, or $4.9 million over seven years, said the offer was only one-fifth what it needs. Meanwhile, it has asked the City of Darlington to municipalize its electric system. Dixie Cup has asked for a citizen referendum; the city council is awaiting the outcome of a municipalization feasibility study.

AT&T Enters Local Market in Maryland

Phillip S. Cross

The Maryland Public Service Commission (PSC) has authorized AT&T Communications of Maryland, Inc. to compete with local exchange telephone carriers (LECs) throughout the state as a "co-carrier and reseller." According to the PSC, AT&T plans to enter the LEC market as a reseller, expanding over time to offer a full range of facilities-based services.

By separate order, the PSC opened a new proceeding to set wholesale prices for the components of local exchange services.

CPEX Adds Multihour Trading

MAY

16

The Margaret Chase Smith Center for Public Policy's Project for the Study of Public Regulation and the Environment, Maine's Future Energy Policy, Augusta Civic Center, Augusta, ME

(207) 581-1539

16-17

Association of Energy Engineers, The New Power Market: Opportunities for Producers, Sellers & Users of

N.J. Softens Gas Price Spike

Phillip S. Cross

The New Jersey Board of Public Utilities (BPU) has approved a plan by Public Service Electric and Gas Co., a combined electric and gas utility, to reduce charges for commercial and industrial (C/I) gas sales customers to temper "dramatic" gas cost increases linked both to price moves in December at the New York Mercantile Exchange (NYMEX), and a recent switch from an annual levelized adjustment clause mechanism to an indexed monthly adjustment.

According to the BPU, the utility's C/I gas customers would see a 20-percent rate increase for January 1996.

Niagara Mohawk Refuses "Adequate assurances"

Lori A. Burkhart

U.S. District Court Judge John E. Sprizzo has ruled that Niagara Mohawk Power Corp. (NiMo) has no right to demand "adequate assurances" from independent power producers (IPPs) that unsecured tracking account balances will be repaid. The decision stems from a series of lawsuits filed by IPPs in response to a February 1994 letter from NiMo threatening contract repudiation unless the assurances were given (Ecogen Four Partners v.

Plan Will Substitute for Gas Capacity Release

Phillip S. Cross

The New Jersey Board of Public Utilities (BPU) has authorized Elizabethtown Gas Co., to change its seasonal delivery service tariff to allow third-party suppliers to bid on incremental pipeline capacity for a limited time. (Unlike other gas distributors [LDCs], Elizabethtown could not take advantage of capacity-release programs approved by the board.) The company will allocate up to 2.5 billion cubic feet of capacity for the new offering and will not contract for additional capacity to operate the program.

Former Workers Allege Age Discrimination

Lori A. Burkhart

Seventeen former Florida Power Corp. (FPC) employees have filed a lawsuit in U.S. District Court in Ocala against the utility, alleging age discrimination. Plaintiffs claim that most of the workers who lost jobs in restructuring layoffs are over 40, and were targeted because of high salaries or costly illnesses. If certified as a class-action lawsuit, plaintiffs say as many as 1,000 workers laid off since 1993 may join them. FPC disputes that estimate, claiming that the ages of the laid-off workers ranged from the 20's to the 60's. (em LB t

Lori A.

Multiyear Rate Agreements to Continue

Phillip S. Cross

Noting controversy surrounding multi-year incentive agreements in utility rate cases, the New York Public Service Commission (PSC) has approved guidelines for filing multiyear rate proposals and requests to depart from approved rate plans. The guidelines deemphasize the importance of "global" settlements in such cases, and reaffirm the rights of nonsettling parties to litigate issues raised by incentive and multiyear rate proposals. The PSC acknowledged the worth of multi-year settlements, but declined to rely exclusively on such agreements.

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