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Headlines

Fortnightly Magazine - December 1997

over the state's transmission lines by creating an ISO for eastern Wisconsin. They believe the interfaces to the west and south are controlled by three utilities that "act in inconsistent and self-interested ways."

The group agreed that construction of a 500-MW gas-fired plant in eastern Wisconsin should begin by April 1, 1998. The group said utilities must agree up front to purchase the output of the plant for six to 10 years.

OKLAHOMA TO RESTRUCTURE GAS INDUSTRY

Oklahoma appears poised to restructure the state's natural gas industry.

The Oklahoma Corporation Commission has proposed rules that would require each utility to identify and propose recovery of stranded costs by July 1, 2001. The recovery plan also must include mitigation strategies and transition periods. If stranded cost recovery is allowed, then they would be recovered on a system-wide basis from all classes of end users over a maximum of five years.

Standards of conduct for qualified gas providers would require offering service through pricing structures. Companies would update the following data monthly: number of end-users served and gas volumes delivered by city, county and local distribution system; logs of complaints; signed fact sheets; signed contracts; pricing schedules; evidence of surety bond and insurance coverages.

The proposed rules also include certification procedures for service providers, service reliability requirements and regulatory safeguards to ensure gas service availability and service at reasonable costs for residential ratepayers. A public hearing on the rules has been set for Dec. 3.

ENTERGY SUES UNION PACIFIC

Two Entergy Corp. subsidiaries, Entergy Services Inc. and Entergy Arkansas Inc., have filed a lawsuit against Union Pacific Railroad Co., alleging breach of coal shipping contracts.

Union Pacific and Entergy have a contract for Union Pacific to ship coal by rail from the southern Powder River Basin of Wyoming to two plants in Arkansas - the 1,659-megawatt White Bluff Steam Electric Station and the 1,678-MW Independence Steam Electric Station. The plants are capable of burning 13 million tons of coal annually.

Entergy filed the lawsuit in the U.S. District Court for the Middle District of Louisiana, alleging that Union Pacific breached service standards by failing to meet transit time standards and failing to comprise trains of the required length. Entergy claims that the result is impairment of ability to serve its customers and has asked for damages of more than $1 million.

S&P DOWNGRADES FOUR U.K. UTILITIES

Standard & Poor's has downgraded ratings of four of the largest utilities in the United Kingdom, reflecting a combination of the windfall tax on privatized utilities, capital restructuring, and leveraged acquisition financings.

About $7.5 billion of rated debt is affected.

The four utilities are Yorkshire Electricity Group Plc., United Utilities Plc., Hyder Plc., and BG Plc. The Yorkshire Electricity downgrade reflects the impact of higher financial leverage on Yorkshire's future debt-servicing capacity following its takeover by U.S. companies, American Electric Power and Public Service Co. of Colorado (now New Century Energies due to a merger).

Ratings were lowered on "multi-utilities" United Utilities Plc., and Hyder Plc., which were removed from CreditWatch with negative implications on July 3 following