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News Digest

Fortnightly Magazine - January 15 1998

energy service provider, a wires company and a system operator. All utilities would be allowed to petition to recover stranded costs through a nonbypassable wires charge. Proposed Transition Plan for Retail Competition in the Electric Industry, Nov. 10, 1997 (staff report, Miss.P.S.C.).

GAS RATE STABILITY. To combat gas price volatility, the New

York commission has directed each large natural gas local distribution company to offer a plan for providing gas to retail customers at a fixed price during the 1997-98 heating season. LDCs must fix the commodity cost of gas and may fix other cost elements, but at the same time may allow reconciliations to account for weather variations, pipeline rate hikes and the like. Also, utilities may limit the program to 10 percent of customers in each service classification. Case 97-g-0600, Oct. 7, 1997 (N.Y.P.S.C.).

UTILITY DIVERSIFICATION. The Maine PUC declined to establish a "per se" rule prohibiting electric companies from engaging in natural gas distribution, in light of the Legislature's recent actions permitting affiliates of electric transmission and distribution companies to market electricity. But in the case in question, it required Central Maine Power Co. to operate through a separate subsidiary to carry out its proposal to extend gas distribution service to unserved areas in the state. Docket No. 96-786, Sept. 26, 1997 (Me.P.U.C.).

WATER RETURNS. Massachusetts amended rules for water

utilities, lowering the overall permitted range for rate of return on common equity. It cut both the ceiling (from 16 to 14.5 percent) and the floor (from 13 to 11.5 percent). D.P.U. 96-90-a, Oct. 16, 1997 (Mass.D.P.U.).

OVERSEAS INVESTMENT. Michigan certified a plan by CMS Energy Corp., an affiliate of Consumers Energy Co. (the combined electric and gas utility), to invest in energy ventures in Brazil. The company plans to buy electric distribution companies offered for sale as part of industry privatization efforts under way in the Brazilian state of Rio Grande do Sul. It also plans to bid on developing a liquefied natural gas system in the Brazilian state of Amazonas, and to join with a consortium of other investors in buying an electric utility in the state of São Paulo. Case Nos. u-11519, u-11520, Oct. 15, 1997 (Mich.P.S.C.).

STRANDED COSTS. New Jersey limited the use of securitization plans by electric utilities to recover only 50 percent of stranded costs. The board imposed a series of tests to qualify for securitization and noted that final securitization percentage, as well as the total amount of stranded costs allowable by any means, will depend upon the depth of rate reductions achieved by utilities in their restructuring proposals. Docket Nos. ex94120585y, Sept. 19, 1997 (N.J.B.P.U.).

GAS SUPPLY CONTRACTS. Indiana won't disapprove contracts

by two distributors, Citizens Gas and Coke Utility and Indiana Gas Co., to purchase wholesale gas supply from Proliance Energy LLC, a marketing affiliate, despite charges by industrial users and others that the deal would not ensure the lowest-cost gas supply for utility customers. The state commission finds no evidence of intent to circumvent regulation, but says it will monitor quarterly gas cost filings by both utilities. Case No.