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Fortnightly Magazine - August 1996

Order 888 Petitions Strong on Stranded Costs

Lori A. Burkhart

About 90 parties have filed petitions seeking changes to Order 888. Claiming "errors," the National Association of Regulatory Utility Commissioners (NARUC) asked the Federal Energy Regulatory Commission (FERC) to reverse its assertion of:

s Jurisdiction over unbundled retail transmission services

s "Primary" authority over retail stranded-cost recovery when retail consumers convert to wholesale

s "Backstop" authority to provide stranded-cost recovery when an end user changes power suppliers under a state-established retail wheeling system.

Michigan Approves LEC Rate Restructuring

Phillip S. Cross

The Michigan Public Service Commission (PSC) has authorized Ameritech Michigan, a local exchange carrier (LEC), to restructure its rates to comply with a new state law forbidding LECs to charge less than the total-service, long-run incremental cost for each local exchange service offered. The LEC claimed that it began with basic services because prices for that segment of the market had been set artificially low for customers in rural areas of the state.

Distributed Generation: Competitive Threat or Opportunity?

George T. Preston, and Daniel M. Rastler

Will new technologies undermine the customer base?

Or can utilities use them offensively?The electric power industry stands poised to move to a fully competitive market. Business realities already imply a broadening of customer choice.

CGT Suggests New Regulatory Model

Lori A. Burkhart

In response to a request for comments on negotiated terms and conditions of service, the Columbia Gas Transmission Corp.

Gas LDC to Recover Stranded Costs

Phillip S. Cross

The Idaho Public Utilities Commission has authorized Intermountain Gas Co., a local distribution company (LDC), to implement a new interruptible-distribution transportation service for large-volume industrial customers, including a charge designed to minimize stranded costs associated with migration of customers from sales tariffs.

Green Pricing: The Bigger Picture

Brian Byrnes, Maribeth Rahimzadeh, Renee de Alba, and Keight Baugh

It's not just for residential consumers. Research suggests a

substantial niche market

of commercial

and industrial customers that are favorably disposed to green electricity.Seven utilities across the country have launched "green pricing" programs for residential electric customers. At these utilities, up to 3 percent of residential customers pay rate premiums to underwrite the construction and use of renewable electric generation.

Santa Outlines FERC's Future Focus

Lori A. Burkhart

The Federal Energy Regulatory Commission's Donald F. Santa, Jr. looked beyond Order 888 electric restructuring when he addressed the second annual DOE/EPRI Executive Conference in Washington, DC, on May 21. According to Santa, the post-Order 888 electric agenda will be marked by three cross-cutting issues.

First, the FERC will grapple with market power in an open-access environment. While open access will mitigate the market power of transmission-owning utilities, the FERC needs to consider market power stemming from generation concentration.

Off Peak

An advance peek at the Edison Electric Institute's 1995 Statistical Yearbook of the Electric Utility Industry reveals a general trend toward increase over last year's figures (see Table 1).

s Installed capacity totaled 749,723 megawatts (Mw), up 0.5 percent. Investor-owned utility (IOU) capacity alone rose 0.4 percent. And the South Atlantic division showed the largest increase: 1.6 percent.

s Generation totaled 2,994,529 gigawatt-hours (Gwh), up 2.9 percent. IOUs contributed 2,340,482 Gwh to this total, increasing its output 1.4 percent.

Research and Renewables: Funding at the National Energy Labs

Joseph F. Schuler, Jr.

Shrinking budgets force staff cuts, but some projects

find friends in high places.

"They're putting the best face on the inevitable."

Funding for renewable energy for government/ industry research partnerships took another beating early this summer (em and that's on top of a $113-million cut suffered this fiscal year.

Lakehead Pipe Line Appeals FERC Ruling

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has refused to rehear or modify a June 15, 1995, rate order (Opinion 397) that denied Lakehead Pipe Line Partners, L.P. any income-tax allowance related to "curative allocations" under section 704(c) of the Internal Revenue Code that increase the general partner's taxable income beyond his or her proportion of company ownership.

The ruling (Opinion 397-A) affirms Lakehead's entitlement to a tax allowance based on the income attributable to corporate partners, but imposes a limit.

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