Detroit Edison Co. (DE) has received approval from the Michigan Public Service Commission for
10-year sole-supplier contracts for electric power and related services with Chrysler, Ford,...
a detailed cost study. And certainly if anyone wanted to come forward and show there was a substantial cost shift going on, we would examine it."
Enron, in its petition, notes that a fixed-price offer option would only increase cost shifting.
"An LDC's captive ratepayers will be subsidizing sales made under the FPO, making it difficult for non-utility suppliers to compete," the company's petition reads in Case No. 97-G-0600. "LDCs will utilize, at costs which cannot be policed by the Commission, any utility assets, personnel or facilities needed to offer the FPO service."
Enron says fixed-price options have no place in the regulated marketplace, as they distort price signals and stifle competition. But Teumim says the scenario Enron describes won't become reality.
"If an LDC artificially inflated that [fixed] price to make money, we intend to, when the filings come in ... make sure it was strictly a pass through," he says.
He noted that the commission could analyze the petitions for rehearing and decide to take the fixed-price option off the table.
Is he pleased with the participation in the core program?
"Tough question," Teumim says. "There are lots of implementation issues. There's lots of customer inertia. There's a lot of customer education that has to be done. And the marketers tell us that the margins on residential are razor thin. So I'm not sure I have a good crystal ball that would tell me what the 'right pace' of migration would be."
Meath, of Agway, could probably suggest a pace: simply looking ahead to the states out front. t
Joseph F. Schuler Jr. is associate editor of PUBLIC UTILITIES FORTNIGHTLY.
Gas Unbundling in the Northeast
Connecticut. A docket opened in July (97-07-11) will investigate all gas unbundling. Only commercial-industrial rates are unbundled now (See, Docket Nos. 94-01-12, et al., Aug. 2, 1995, 163 PUR4th 233). Unbundled gas rates have existed in the state since April 1996. After the docket is closed, the DPUC will reopen prior rate cases and establish firm transportation rates for residential customers. DPUC officials hope the new program could start by the end of 1998.
Massachusetts. Of the 10 utilities under DPU jurisdiction, five have unbundled rates: Boston Gas Co. (D.P.U. 96-50), Bay State Gas Co. (D.P.U. 95-104), Blackstone Gas Co. (D.P.U. 96-65), Essex County Gas Co. (D.P.U. 96-70) and Fall River Gas Co. (D.P.U. 96-60). The DPU has noted that participants in a Bay State collaborative procedure have been developing proposals for complete unbundling of the company's Massachusetts customers. A similar collaborative to establish principles and procedures will help carry out statewide goals. The department has directed the 10 LDCs to issue a report by Nov. 15.
Maine. The commission recently ordered Northern Utilities Inc., a subsidiary of Bay State Gas Co. and the only gas LDC in Maine, to file a proposal to unbundle all rates (Docket No. 97-267). In issuing a Notice of Inquiry, the commission recognized that two interstate gas transmission lines have been proposed in the state, plus an LNG storage facility. It also has received requests for approvals