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Fortnightly Magazine - July 1 1996

Competing Bids Filed for Cajun

Lori A. Burkhart

Ralph Mabey, trustee for Cajun Electric Power Co-op. in its bankruptcy proceeding, has filed a reorganization plan at the Federal District Court in Baton Rouge, LA. Mabey chose a bid from NRG Energy, Inc. and Zeigler Coal Holding Co.: about $1.1 billion in cash to purchase most of Cajun's nonnuclear assets. However, that offer faces a competing bid filed by the Cajun Electric Members Committee, Southwestern Electric Power Co. (SEP), and Gulf States Utilities.

QF Fails to Raise Avoided Cost Rates

Phillip S. Cross

The West Virginia Public Service Commission (PSC) has ruled that it is preempted by federal law from modifying the avoided-cost rate in a purchased-power agreement implemented under the Public Utility Regulatory Policies Act of 1978 (PURPA).

The developers of a qualifying cogeneration facility (QF), Bituminous Power Partners, L.P., had asked the PSC to raise the contract rate for avoided energy in its purchased-power contract with Monongahela Power Co.

Moody's: NiMo Bankruptcy Possible

Lori A. Burkhart

Moody's Investors Service downgraded the long-term credit ratings of Niagara Mohawk Power Corp. (NiMo) on April 25, citing the utility's "limited progress" in achieving the goals set forth in its "PowerChoice" proposal, among other concerns.

Virginia Rejects IntraLATA Competition

Phillip S. Cross

The Virginia State Corporation Commission (SCC) has rejected a request from Bell Atlantic-Virginia, Inc., a telecommunications local exchange carrier (LEC), to reclassify intraLATA message toll service (MTS) as competitive under its new alternative regulation plan.

Jury Awards EMF Damages Discrimination

Lori A. Burkhart

For the first time, monies have been awarded in an electromagnetic field (EMF) suit. Although it decided that a high-power underground electric transmission line did not cause cancer in Atlantic Electric Co. (AE) customer John Altoonian, a six-person jury has ordered the utility to pay him about $760,000 in damages for lost wages and emotional distress. The first jury was hopelessly deadlocked; the current alternate panel found AE unintentionally negligent. AE calls the award "confusing" and plans to appeal. (em LB

Joseph F. Schuler, Jr.

States Prepare for Federal Telecom Mandates

Phillip S. Cross

To accommodate requirements imposed by the Telecommunications Act of 1996, the North Carolina Utilities Commission (NCUC) has issued a set of procedural requirements governing requests for interconnection services. According to the NCUC, the federal timeline for compulsory arbitration of differences arising during the course of interconnection negotiations could leave as little as 85 days to render a decision in each case.

Perspective

Brian Regli

A struggle is underway for ownership of the utility business. Not a fight between companies, but a struggle within each company for the future of the utility.

The battle pits two groups against each other. One side consists of the operational professionals, such as the engineers who build and maintain the power grid. The other side includes an emerging group of marketing and communications professionals.

In the past, the engineers "owned" the company.

LECs Agree on Resale and Interconnection

Phillip S. Cross

The Florida Public Service Commission (PSC) has approved rates and conditions for interconnection between BellSouth Telecommunications, Inc., a local exchange carrier (LEC), and two new competitive providers of local exchange services, Metropolitan Fiber Systems of Florida, Inc. (MFS) and MCI Metro Access Transmission Services, Inc. (MCI). By a separate order, the PSC has adopted provisions for resale of BellSouth services by competing local service providers, including the unbundling of local service components.

A State Legislator Looks at Retail Wheeling

As FERC moves forward, most state legislators have remained content to sit back and wait for others to act. Part of this reticence stems from politics—the difficulty of changing course, invading someone else's turf, or tackling a new subject outside one's area of expertise. Legislators view problems differently than do regulators.

Thomas J. Sloan

Lawmakers see different imperatives than regulators or industry execs, such as protecting the tax base for the local community.

Order 888, Between the Lines

Alex Henney

It's as significant for what it does not do as for what it does.

Order 888 marks a significant, yet limited, step in deregulating the U.S. electricity supply industry. Most important, for utility shareholders, the Federal Energy Regulatory Commission (FERC) has now apparently established a right to recover costs prudently incurred under the old regulatory compact (if not contract) that may become stranded by the Order. But (em and this is an important but (em the FERC is not going to hand out the money easily.

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