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In Brief...

Fortnightly Magazine - June 15 1996

Sound bites from state and federal regulators.

Primergy Merger. Michigan regulators have OK'd the merger between Wisconsin Electric Power Co. and Northern States Power Co. The settlement assumes about 2 percent in cost savings on combined Michigan revenues, and imposes a four-year moratorium on rate hikes. Case No. U-10913, April 10, 1996 (Mich.P.S.C.).

Gas Pipeline Certification. Michigan certifies Thunder Bay Pipeline Co., L.L.C. to construct and operate a 47-mile natural gas pipeline in northern Michigan, at transport rates up to 4.44 cents per Mcf, denying a competing plan by Spartan Intrastate Pipeline System, which had raised antitrust concerns about Thunder Bay project ownership by CMS Energy Corp. and Michigan Consolidated Gas Co., both local distributors. Case Nos. U-10782 et al., April 10, 1996 (Mich.P.S.C.).

Electric Restructuring. North Carolina says it will focus on four areas in electric utility restructuring: 1) reliability and regional planning, 2) obligation to serve, 3) stranded costs, and 4) ancillary costs of providing service in a competitive market. Docket No. E-100, Sub 77, April 3, 1996 (N.C.U.C.).

Gas Overrun Penalties. Pennsylvania court affirms state PUC order requiring UGI Utilities, Inc. to cut purchased-gas cost rates for firm service to reflect overrun penalties paid by interruptible (IT) customers that failed to curtail use as required. Penalties are deemed gas-cost items, since firm customers bear risks from IT overruns. No. 25 C.D. 1995, March 14, 1996 (Pa.Commw.Ct.).

Emergency Power Shortages. New rules in Pennsylvania force electric utilities to notify PUC by telephone at outset of any load emergency, and to keep regulators apprised by faxing updates at least every three hours on: 1) fuel inventories, 2) fuel deliveries, 3) burn rates, and 4) curtailment schedules. Docket No. L-950101, Feb. 26, 1996 (Pa.P.U.C.).

Water Utility Mergers. Pennsylvania issues policy statement to encourage water utility mergers to improve financial viability. Incentives (only for acquisitions of small systems, where single-tariff pricing applies) include: acquisition adjustments (under strict guidelines), premiums on rates of return, deferral of improvement costs, and plant-improvement surcharges. Docket No. M-00950686, Feb. 22, 1996 (Pa.P.U.C.).

Water Resource Planning. Pennsylvania decides not to impose comprehensive rules for integrated resource planning on the state's water utilities, citing jurisdictional impediments and distinctions between the water industry (declining per-customer demand and capital needs for system upgrades), and the energy industry (rapid growth and new facility construction). Docket No. L-00930077, Jan. 31, 1996 (Pa. P.U.C.). t

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