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Fortnightly Magazine - September 15 1996

Purchased Power: How Much n the Fuel Clause?

Phillip S. Cross

The North Carolina Utilities Commission (NCUC) has rejected a request by Duke Power Co. to recover as a cost of fuel some 90 percent of the price of bulk power purchased from Enron Power Marketing, Inc.

Instead, it allowed Duke to recover only 59 percent Enron purchases, the level of fuel costs Enron could verify by directly contacting the generating utilities. Nevertheless, it said it would not accept "hearsay" evidence on the share of costs attributable to fuel.

Northwest Utilities Form ISO

Lori A. Burkhart

Seven electric utilities in the Northwest have formed an independent system operator (ISO), called "IndeGo," to coordinate their electric transmission. IndeGo will operate as a single control area, responsible for the operation of transmission-grid facilities carrying 230 kilovolts or more that are owned or directly controlled by the member utilities.

Local Exchange Resale: Two Views

Phillip S. Cross

Two recent decisions from Hawaii and Michigan illustrate some of the issues now arising on the question of resale of telephone service by local exchange carriers (LECs).

In Michigan, the state public service commission has directed the state's LECs to offer all basic local exchange services for resale in a nondiscriminatory manner to competitors and affiliates at wholesale rates. It defined "wholesale rates" as retail rates less the avoided costs to the LEC.

Mass. Makes Strides Over Choice

Lori A. Burkhart

Massachusetts is moving forward with electric and gas competition on all fronts. Environmental Futures, Inc., the program administrator for Massachusetts Electric Co.'s (ME's) "Choice: New England" pilot, has issued requests for proposals for up to 100 million kilowatt-hours of electricity so that electric suppliers around the country may compete to service about 10,000 current ME customers. The one-year voluntary pilot, which begins in December, will let residential and small commercial customers choose their electric supplier.

North Dakota OK's Primergy Merger

Phillip S. Cross

The North Dakota Public Service Commission (PSC) has approved the Primergy merger between Northern States Power Co. and Wisconsin Energy Corp.

As an important factor in its decision, the commission noted that after the merger, Primergy plans to reduce North Dakota electric rates by 1.5 percent and gas rates by 1.25 percent, with a moratorium on increases until 2001.

ALJ Rejects SCE Request for PBR

Lori A. Burkhart

A California Public Utilities Commission (CPUC) administrative law judge (ALJ) has issued a proposed decision denying interim performance-based rates (PBR) for Southern California Edison's (SCE's) transmission and distribution services. Since SCE plans to transfer to an independent system operator on January 1, 1998, the ALJ found the interim period too short for PBR to significantly benefit shareholders or ratepayers. SCE will, however, have the opportunity to amend its application to propose a

long-term PBR mechanism for distribution service only.

Off Peak

New thinking defines "stranded costs" in terms of

asset value and return on capital, not lost revenues.

On July 3, the Pennsylvania Public Utility Commission (PUC) submitted its report to the Governor and General Assembly on retail electric competition (PUC Docket No.

I-940032).

Indiana Stranded Costs "Minor"

Lori A. Burkhart

The Indiana Utility Regulatory Commission (URC) has given the Indiana legislature a brief summary report in advance of its final energy report on competition.

Texas Merger Nears Settlement

Lori A. Burkhart

Southwestern Public Service Co. (SPS) and Public Service Co. of Colorado (PSCC) have promised to credit Texas ratepayers a minimum of $3 million in annual bill savings (em one part of the settlement proposed on July 8 in their merger case before the Texas Public Utilities Commission (PUC). According to SPS, the proposed settlement represents an agreement reached between it, the staff of the Texas PUC, and five intervenors in the merger case.

The PUC's administrative law judge has suspended the proceeding so the various parties can finalize details.

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