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Fortnightly Magazine - July 15 1996

The Vanishing LATA: Pricing Chasms and Clashing Markets for Toll Service

Michael H. Lee, and William A. Rosquist

By Michael H. Lee and William A. RosquistThe Vanishing LATA:

Pricing Chasms

and Clashing Markets

for Toll Service

Wide disparities can occur in toll rates within some states (em a legacy of multiple LATAs. Now, with

barriers falling, where will prices go?

Penn. Examines Utility Accountability for Contractors

Lori A. Burkhart

Penn. Examines

Utility Accountability

for Contractors

Pennsylvania State Senator Albert V. "Bud" Belan (D-West Mifflin) has disagreed with the findings of an internal investigative report by former state Attorney General Walter Cohen that exonerated Peoples Natural Gas Co. (PNG) from any responsibility for the alleged attack and rape of a utility customer by a private contractor hired to read gas meters.

Service Complaints Kill Oregon Price Caps

Phillip S. Cross

The Oregon Public Utility Commission (PUC) has terminated an alternative regulation plan adopted for U S WEST Communications, Inc. a telecommunications local exchange carrier (LEC), in 1991.

Flexible Pricing and PBR: Making Rate Discounts Fair for Core Customers

Tim Woolf, and Julie Michals

With competition looming, electric utilities increasingly resort to price discounts, both to retain customers and to alleviate some of the pressure to introduce retail competition. Performance-based ratemaking (PBR), which allows utilities greater flexibility in offering price discounts, is emerging as an integral component of many restructuring proposals.

However, flexible pricing can create inequity among ratepayers.


Marija Ilic

Some believe that small-scale, distributed generation will usher in a new era of magically inexpensive power: Industrial users will run their own cogeneration units. Many residential customers will use some sort of portable (em perhaps exotic (em power equipment in their homes. Existing, utility-owned, large-scale generating stations will be cast off on the path to ultimate efficiency.

Meanwhile, New England is running out of power this summer.

California Affirms PBR Plan

Phillip S. Cross

The California Public Utilities Commission (CPUC) has rejected claims that an experimental performance-based rate plan for San Diego Gas and Electric Co., a combined electric and natural gas utility, was yielding "perverse results" and should be modified in keeping with the PUC's purposes in establishing the experiment. According to the Utility Consumers' Action Network, the utility had earned a profit that exceeded its authorized return by 114 basis points while the plan was in effect.

State PUCs: Still Setting the Agenda

Joseph F. Schuler, Jr.

Quizzed by lawmakers, and buffeted by political winds, regulators ponder an uncertain future.

Agree or not, utility commissioners are part judge, part regulator, and part politician.

Schaefer Pushes Restructuring

Joseph F. Schuler, Jr.

Rep. Dan Schaefer (R-CO), closed his final hearing on electric industry restructuring with what sounded like a promise to push utilities down the bumpy path of retail wheeling.

"My vision for the future is one where all consumers have the ability to pick and choose among numerous competitive suppliers of electricity," Schaefer said. "It is one where all consumers have the benefit of lower rates, better services, and new innovations brought on by competition . . .

LDC to Sell Production Facilities to Affiliate

Phillip S. Cross

The West Virginia Public Service Commission (PSC) has authorized Hope Gas, Inc. to sell its production facilities to an affiliate, CNG Producing Co., for the current book value of the properties, $4.512 million. The DPUC emphasized that it would rely on representations that Hope Gas would work to reduce the risks to its ratepayers for lost and unaccounted-for gas by pursuing meter relocation on a prioritized basis.

The Discount Debate: Recent PUC Rulings On Local Exchange Resale

Now that incumbent LECs must offer all services for resale, state regulators must decide the appropriate level of discount for the new resale tariffs.

Discounts could put incumbent LECs at a disadvantage, since many local exchanges already price below the cost of service, particularly for basic residential access.