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Marketing Affiliate Questioned as Utility Shifts Rates

Fortnightly Magazine - March 15 1997

While approving a

three-year settlement on electric rates for Niagara Mohawk Power Corp., the New York Public Service Commission has accepted a highly controversial increase in minimum charges for low-use residential customers.

It also approved a plan to establish an

$11-million, ratepayer-supported fund to promote additional sales to large, alternate-fuel customers, but warned the company that the court would closely monitor relations between the utility and its energy marketing affiliate, Plum Street Energy Marketing.

Under the approved rate plan, which calls for a net reduction in revenues of $10 million by the end of the rate period, the minimum monthly service charge is increased from $8.55 to $12.53 for residential, nonheating customers and to $15.53 for heating customers. Minimum charges for small, general service users also will go up, while large users are awarded a decrease in minimum charge rates.

The commission said that many large-use customers "have been and will continue to pay too much in usage charges to maintain low minimum charges."

The court also approved the utility's plan to set aside $11 million to establish a "Progress Fund" designed to assist large energy users wishing to convert their facilities to gas use. Re Niagara Mohawk Power Corp., Case No. 95-G-1095, Dec. 19, 1996 (N.Y.P.S.C.). t

Phillip S. Cross is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

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