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Fortnightly Magazine - July 1 1996

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.

CPUC Embraces Marginal-cost Ratemaking

Phillip S. Cross

While designing rates for Southern California Edison Co., the California Public Utilities Commission (CPUC) has reaffirmed its commitment to marginal-cost ratemaking "in light of electric industry restructuring." The CPUC used the cost-allocation and rate-design findings to set new rates based on an overall 4.4-percent decrease in revenues adopted in earlier revenue requirement proceedings.

A Champion for Public Power

Joseph F. Schuler, Jr.

Soft-spoken, but no featherweight,

APPA Director Alan Richardson will fight

toe-to-toe with well-heeled

adversaries. If he were a boxer, his name might be Alan "The Right" Richardson.

The executive director of the American Public Power Association (APPA) always toes the canvas, swinging for equity for his 1,750 members, shadowing its "heavyweight" adversaries, investor-owned electric utilities (IOUs).

FERC Upholds Rollin-in Rates for Great Lakes Gas

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has issued its rehearing order for Great Lakes Gas Transmission Ltd. Partnership (GLGT), upholding its July 26, 1995, order allowing GLGT to roll in the costs of expanding its natural gas pipeline facilities (Docket Nos. RP91-143-030 et al.).

The July 26 order was issued on remand from the U.S. Court of Appeals for the D.C. Circuit, reversing a 1991 order allowing incremental pricing. The case arose when GLGT spent over $700 million to expand its pipeline system.

Montana PSC Limits LDC Rate Increase

Phillip S. Cross

The Montana Public Service Commission (PSC) has authorized Montana-Dakota Utilities Co., a natural gas local distribution company (LDC), to increase rates by $1.008 million. The increase includes an allowance for return on common equity of 12 percent. The PSC permitted the new rates to enable the LDC to recover the entire nongas cost increase from the residential customer class. It refused, however, to approve rate rebalancing to shift an additional $1.5 million of revenue requirement to the residential class without a thorough study of both gas and nongas costs.

Pipelines: Beware of Riptides

Gas restructuring didn't end with Order 636, it just outran the regulators. Now the rules come from the downstream dealmakers.

David A. Foti, and Brian J. Cohen

Gas restructuring didn't end with Order 636, it just outran the regulators. Now the rules come from the downstream dealmakers.

D'Amato Sends PUHCA Bill to Mark Up

Lori A. Burkhart

"This is not an intent to strip away consumer protection," Sen. Alfonse M.

D'Amato (R-NY) told

a Senate panel about S. 1317, a bipartisan bill to repeal the Public Utility Holding Company Act (PUHCA).

D'Amato, chair of the Senate Banking, Housing and Urban Affairs Committee, received nods from federal and state regulators at the June 6 hearing, although each voiced reservations. Three utility chiefs spoke in favor of the legislation.

Consumer advocates took the opposite tack.

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