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News Digest

Fortnightly Magazine - January 15 1998

operations of Public Service Co. of New Hampshire for $1.4 billion in cash. The co-op proposes to cut PSNH electric rates by 20 percent, and at the same time allow more than 90 percent of the utility's electric customers to acquire direct ownership and control of their electric utility provider. PSNH is unlikely to accept the offer.

State Legislatures

GO-SLOW" APPROACH. A Utah legislative panel decided not to move forward on an electric restructuring bill, instead deciding on further study. Electric deregulation and customer choice task force members have concluded six months of hearings and have found that restructuring is too complex to push through the next legislative session.

ILLINOIS RESTRUCTURING. The Illinois Legislature approved an electric restructuring bill Nov. 17, requiring customer choice May 1, 2002. But Illinois Gov. Jim Edgar has expressed some concerns with the bill, which requires a 20-percent residential rate cut for customers of Commonwealth Edison Co. and an initial 15-percent rate cut for customers of Illinois Power Co. The bill allows for stranded cost recovery after mitigation and for securitization. Edgar has until Jan. 28 to decide whether to sign.

ELECTRIC RESTRUCTURING. The Massachusetts Legislature on Nov. 19 approved a bill to restructure the state's electric industry. Massachusetts Gov. Paul Cellucci signed the bill on Nov. 25, 1997. The bill gives customers a 10-percent rate cut by March 1, and another 5-percent cut when utilities divest their generation assets about 18 months later. The bill would allow utilities to recover "legitimate" stranded costs.

Courts

NUCLEAR WASTE. A federal appeals court ruled the Department of Energy is responsible for the storage costs of spent nuclear waste at the nation's nuclear power plants. DOE is obliged by law to develop a repository, slated for Yucca Mountain, Nev., but has been slow to move forward. Customers of nuclear utilities have paid billions to fund the repository. The utilities likely will work out a settlement regarding the amount they will reimburse to customers. Northern States Power Co. v. DOE and the United States of America, Civ. Action No. 97-1064, Nov. 14, 1997 (D.C.Cir.).

FERC

INTERSTATE MERGER. Commission granted conditional approval of the proposed merger of Interstate Power Co., IES Industries, and WPL Holdings Inc., to form a new holding company, Interstate Energy Corp., on finding that the merging companies had taken steps to mitigate transmission market power in the Wisconsin Upper Michigan System and had agreed to file a proposal for an independent system operator without four months after merger approval. Opinion No. 419, Docket Nos. ec96-13-000, et al., Nov. 12, 1997.

TRANSMISSION PRICING. Marking a distinct contrast with the design of the PX and ISO in California, the Commission approved an independent system operator for the Pennsylvania-New Jersey-Maryland Interconnection that will administer both bilateral schedules and a cash spot market, while also maintaining reliability and dispatch. The decision, a victory for the so-called PJM "Supporting Companies," also approved locational marginal pricing based on bids in the spot market to determine rates for transmission service, plus a system of fixed transmission rights to manage line congestion. Docket No. oa97-261-000, Nov.