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Fortnightly Magazine - November 1 1997

Portland General Eyes Franchise Fees

Lori A. Burkhart

Portland General Electric doesn't want to sell electricity anymore.

PGE, a wholly owned subsidiary of Enron, wants to focus on the transmission and distribution of electricity and has asked the Oregon Public Utilities Commission to allow all 670,000 of its customers to choose their electric provider.

It also has proposed a new way to calculate franchise fees in an unbundled environment.

In its customer choice proposal, PGE said restructuring had triggered the need for changes in the way franchise fees are calculated.

Off Peak

Competition draws Christians, conspiracy theorists.

SO, WHO WANTS TO COMPETE AGAINST THE LOCAL UTILITIES? In most of the country, potential competitors tend to fall into three categories: (1) traditional utilities from within or nearby the affected state that wants to expand into foreign service territories; (2) unregulated subsidiaries of traditional utilities; or (3) power marketers and/or aggregators. In California, however, it's more of a mixed bag.

Paine Webber Reassesses Lure of Stocks

Lori A. Burkhart

Electric utilities that may not appear attractive on a "standalone basis" could become attractive takeover targets because of their location, according to PaineWebber's Electric Utility Monthly Industry Update.

The company pointed to the recent failed attempt by CalEnergy to acquire New York State Electric and Gas. PaineWebber noted that, at the time of the attempted takeover, NYSEG was not a favored stock. In fact, NYSEG was not on PaineWebber's list of possible takeover targets.

PaineWebber said the strategic location of NYSEG appeared to be the key factor in the attempt.

NY PSC Staff Envisions Future of Gas

Lori A. Burkhart

The staff of the New York Public Service Commission has asked for public comment on its report, which found the most effective way to establish competition in natural gas supply is to separate the merchant and distribution functions.

The report said non-regulated entities would provide all future merchant functions. These entities will share the supplier of last resort obligations along with local distribution companies and will share in costs of social programs.

Perspective

Durairaj Asaithambi

We won't move to credit cards until our customers demand the option.

EVERY DAY, CUSTOMERS OF PUBLIC utilities ask the same question: "If I can buy my gasoline, grocery, medicines and all other necessities with plastic, then why can't I pay for my electricity, water, gas and telephone bills that way?"

Public utilities (em except long-distance telephone companies (em have yet to enter full-blown competition. When they do, utilities should decide whether to pursue the credit card option.

Michigan City Still Disputing Stranded Costs

Lori A. Burkhart

The Federal Energy Regulatory Commission has moved closer to deciding the stranded cost dispute between Consumers Energy and the city of Alma, Mich., which intends to construct its own municipal electric system.

On Sept. 10, the FERC set for hearing two stranded cost issues: (1) whether Consumers Energy has met the "reasonable expectation" standard justifying stranded cost recovery from Alma; and (2) if so, what amount the utility may recover. (See, Docket No. sc97-4-000.)

Consumers Energy wants $56.1 million in stranded cost payments from Alma.

Sellers in Power Exchange Can Qualify as EWGS

Lori A. Burkhart

The Federal Energy Regulatory Commission has ruled that all electric power sales into the California power exchange are to be treated as wholesale power sales under Federal Power Act Sec. 201, and for the purpose of qualifying under the definition of "exempt wholesale generator," as defined in Public Utility Holding Company Act of 1935. (See, Docket No. el97-36-000.)

The September 10 ruling was made in response to a request by Southern California Edison, which plans to divest all its fossil-fueled electric generation plants.

Relicensing Settlement Moves to FERC

Lori A. Burkhart

New England Power Co. has agreed with 17 parties, including government agencies and conservation groups, on the relicensing of the Fifteen Mile Falls hydroelectric project on the Connecticut River.

New England Electric System President and CEO John W. Rowe, Gov. Howard Dean (D-Vermont) and Gov. Jeanne Shaheen (D-N.H.) signed the agreement.

The agreement governs requirements for a new, 40-year license for Fifteen Mile Falls, the largest conventional hydroelectric project in New England.

Gas Producers Must Refund Ad Valorem Tax

Lori A. Burkhart

The Federal Energy Regulatory Commission has ordered natural gas producers in Kansas to refund to customers approximately $500 million for erroneously adding the state's ad valorem tax onto interstate rates.

In its Sept. 10 ruling, the FERC said such taxes are not eligible for rate recovery under the Natural Gas Policy Act of 1978 and, following court directive, ordered the customer refund. (See, Docket Nos. rp97-369-000 et al.).

The refund covers gas produced from October 1983, when the petition challenging the add-on tax originally was filed at the FERC, until June 1988.

Power Ploy? Colorado Co-Op Splits with NRECA, But May Rejoin

Joseph F. Schuler, Jr.

Says association too wishy-washy on retail choice.

CONSUMER CHOICE MAY TURN BELLY UP THIS Congress but it has hit the gut of the nation's rural cooperative association: a member co-op has dropped out over the NRECA's stance on a federal Choice mandate.

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