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Fortnightly Magazine - December 1996


John L. Carter was elected to Tucson Electric Power Co.'s board of directors. He replaces J. Burgess Winter, who resigned. Carter recently retired as executive v.p. and CFO of Burr-Brown Corp.

Madison Gas and Electric Co. promoted Terry A. Hanson to v.p. and treasurer. Hanson, who joined the company in 1981, had been treasurer.

Connecticut Natural Gas Corp. promoted two executives and hired a third.

LDC Allows Retail Chain to Aggregate Facilities

Phillip S. Cross

The Michigan Public Service Commission (PSC) has authorized Michigan Consolidated Gas Co., a natural gas local distribution company (LDC), to enter into a special contract permitting KMart Corp. to aggregate its warehouse with its retail locations to qualify for transportation service at all sites.


Un-American Activities

I would like to comment on Joseph Paquette's letter ("Stranded-cost Recovery: It's Constitutional," Mailbag, Oct. 1, 1996) responding to Charles Studness (Stranded-cost Recovery: It's Un-American," Financial News, July 15, 1996, p. 43).

Mr. Paquette suggests that denying recovery of stranded costs amounts to an unconstitutional taking of private property.

Wisconsin Issues ISO Rules

Phillip S. Cross

Finding an independent system operator (ISO) prerequisite to electric industry restructuring, the Wisconsin Public Service Commission (PSC) has issued a detailed set of "minimum standards" for developing and operating an ISO.

The PSC says that the ISO must function independently of generators and must operate the transmission system to protect consumers and sellers of power from anticompetitive use of the wires. In addition, the ultimate responsibility for safety and reliability must be vested in one entity at all times.


American International Partners, L.C. will conduct a feasibility study for a 100-Mw, coal-fired power plant in the northern border region of Vietnam. The proposed project is estimated at $150 million, which includes expansion of a coal mine on the site and development of a limestone mine. The project would be developed jointly with The Vietnam National Coal Corp. The two companies have signed a letter of intent to develop a second plant in the Bac Thai province, 70 kilometers from Hanoi.

CalEnergy Co., Inc.

Michigan Rejects LDC Capacity - Release Sharing

Phillip S. Cross

The Michigan Public Service Commission (PSC) has rejected a proposal by Michigan Gas Utilities, a local distribution company (LDC), to implement a 70/30 sharing mechanism for capacity-release revenue. (The LDC currently credits all such revenues to its customers through a gas-cost recovery mechanism.)

The PSC found the LDC's incentive plan lacking in safeguards to ensure that the company does not earn a windfall profit at the expense of ratepayers.

Energy/Telecom Combo Hits Boston

Lori A. Burkhart

Boston Edison Co. (BE) and RCN Inc., a subsidiary of C-TEC Corp., have announced what they say is the "most comprehensive agreement in the nation" between an electric utility and a broadband network company to provide one-stop shopping for energy and telecommunications services.

The two companies have signed an agreement to form a joint venture to provide local- and long-distance telephone service, video, high-speed internet access, and eventually, energy-management and property-monitoring services.

Gas LDC to Unbundle

Phillip S. Cross

While authorizing Northern Utilities, Inc., the sole instate natural gas local distribution company (LDC), to contract with an affiliated company to provide storage capacity and services, the Maine Public Utilities Commission (PUC) has directed the utility to file an unbundling tariff proposal that includes transportation, load-balancing, and third-party merchant services.

Under the approved supply arrangement, Granite State Gas Transmission, Inc. will provide storage capacity and service from a liquefied natural gas facility in Wells, ME.

GA PSC OKs Discount Contract

Joseph F. Schuler, Jr.

The Georgia Public Service Commission (PSC) has approved its first negotiated contract for discounted electric rates under an economic development incentive plan adopted in 1994.

Georgia Power Co. filed the contract in May after Olin Corp. announced it would relocate 100 manufacturing jobs to Tennessee unless the company could negotiate power rates.

Mass. Pins Telco Competition to TSLRIC

Phillip S. Cross

The Massachusetts Department of Public Utilities (DPU) has decided to use separate cost methods 1) to determine whether a local telephone service is subsidized, and to set price floors for essential monopoly services provided by NYNEX, a local exchange carrier (LEC); and 2) to set rates and price floors for competitive services.

According to the DPU, Total Service Long Run Incremental Cost (TSLRIC) was undisputed as the proper method of testing for subsidies between services.