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PUCs in 1997: Managing the Competition?

Fortnightly Magazine - January 1 1998

the LEC would call attention to excessive retail prices and provide "an impetus for further rate restructuring." %n33%n

The California commission also continued with its plan to encourage competition in the local telephone market. It issued a series of rulings governing services established LECs must offer for resale, restrictions on resale activities and how much wholesale discounts should apply. The commission set the wholesale discount for resale offerings at an interim rate of 17 percent for Pacific Bell and 12 percent for GTE California Inc., the state's two largest local exchange carriers.

Generally, the commission ruled that the local carriers must make all retail telecommunications services available for resale, including new offerings. Notable exceptions included inside wire repair and maintenance services, subsidized "Universal Lifeline" service offered to low-income users, and semipublic payphone service. In addition the LEC must make all telecommunications service promotional offerings available for resale by competitors. Where the promotion includes an offer of free service the LEC must provide the service to the reseller at "a wholesale price of zero." %n34%n

New York and Connecticut also have recently approved the wholesale discount rate that the LECs must apply to existing services when offering them for resale by new local competitors. %n35%n

Phillip S. Cross is a contributing legal editor to Public Utilities Fortnightly.

Antitrust: Oversight at the Courts

FRANCHISE RIGHTS. Portland General Electric Co. can't invoke "state action immunity" to defend its intended division of market into exclusive service territories. Columbia Steel Casting Co., Inc. v. PGE Co., 103 F.3d 1446 (9th Cir.1996).

REFUSAL TO DEAL. State action immunity can't protect PacifiCorp against claims that it refused to sell to and transmit power for resale by co-op. Snake River Valley Elec. Asso. v. PacifiCorp, No. CV 96-038-E-BLM, Apr. 25, 1997 (D.Idaho).

RESOURCE PLANNING. Illinois court turns back attempts to force electric utility to include gas cooling program in state-approved least-cost resource plan. Peoples Gas Light & Coke Co. v. Ill.C.C., 675 N.E.2d 246 (Ill.App.1996). Michigan says state PSC wrongfully interfered with management in modifying a utility's demand-side management plan. Ford Motor Co. V. Mich. PSC, 562 N.W.2d 224 (Mich.App.1997).

1 See Energy Asso. v. N.Y.P.S.C., 653 N.Y.S.2d 502 (N.Y.Sup.). For underlying order see, 168 PUR4th 515 (N.Y.P.S.C.1996).

2 Decision 97-05-040, May 26, 1997, 177 PUR4th 1 (Cal.P.U.C.).

3 Case u-11290, June 5, 1997, 177 PUR4th 201 (Mich.P.S.C.) (requires utilities to offer customer choice to 2 percent of load per year until 2002, when all customers gain choice of suppliers); Order No. 22,514, Feb. 28, 1997, 175 PUR4th 193 (N.H.P.U.C.) (adopts plan to restructure as required by R.S.A. Chap. 374-f. Plan contemplates retail choice by June 30, 1998); Docket No. m-00960890, Jan. 16, 1997, 176 PUR4th 1 (Pa.P.U.C.) (approves rules and guidelines for retail access pilot programs and licensing of competitive generation suppliers); Docket. No. m-00960890, F. 0004, Feb. 13, 1997, 176 PUR4th 25 (Pa.P.U.C.); Re Restructuring of the Elec. Util. Industry in Vermont, 174 PUR4th 409 (Vt.P.S.B.1996) (adopts comprehensive restructuring proposal with direct access by January 1998).

4 Re Narragansett Elec. Co., Docket No. 2515, Sept. 4, 1997 (R.I.P.U.C.);