The debate over restructuring the electric industry has encompassed a revisiting of the traditional rate-of-return (ROR) pricing model. Parties of widely divergent interests increasingly advocate...
Large Users Benefit from PGA Reforms
The North Dakota Public Service Commission (PSC) has directed Northern States Power Co., a local distribution company (LDC), to eliminate three "nongas" cost components from its purchased-gas adjustment (PGA) clause: 1) gas transportation credits, 2) recovery of costs associated with certain interconnection facilities, and 3) tax credits resulting from the 1986 Tax Reform Act. The PSC also permitted the LDC to recover the costs of peak-shaving gas from interruptible as well as firm service customers as part of the total commodity costs included in the base cost of gas.
The PSC also approved the LDC's rate-design proposal, which allocates the rate reduction among customer classes: residential and firm commercial/ industrial (reduced 3.5 percent), small interruptible (reduced 25 percent), and large interruptible (reduced 40 percent). Commissioner Susan E. Wefald dissented, stating that the rate design "disproportionately favors a few large customers." Re Northern States Power Co., Case No. PU-400-95-559, Aug.7, 1996 (N.D.P.S.C.).
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