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News Digest

Fortnightly Magazine - February 15 1998

transmission system.

Environmental Issues

NOx ABATEMENT. New York's investor-owned utilities and

independent power producers have agreed to reduce nitrogen-oxide emissions from power plants. Under the settlement, the utilities and the IPPs have decided how to divide the state's annual allotment of NOx emissions for the years 1999 through 2002. They anticipate the plan will allow New York to reach its goal of reducing NOx emissions by 44 percent by 1999 and by 62 percent by 2003, compared with 1990 levels.

Federal Agencies

PURCHASED-POWER ARBITRATION. A federal arbitrator has

ruled in favor of Basin Electric Power Cooperative in a purchase-power contract dispute with Montana Power Co. Arbitrator Jon Lotis ruled valid and binding the contract requiring Montana Power to purchase 98 MW of power from the co-op over 15 years for about $100 million at present market conditions. Basin Electric also was awarded more than $6.3 million in damages plus interest for the first year of the contract. "I think it also sends a message to others who might be thinking about reneging on power contracts in these unsettled times," said Bob McPhail, Basin Electric general manager. "It is a message that needs to be sent throughout the country as the electric utility industry undergoes deregulation."

State Legislatures

VIRGINIA RESTRUCTURING. Virginia Sen. Jackson E. Reasor

Jr., chairman of a joint electric deregulation committee, plans to introduce an electric restructuring bill in the 1998 Virginia legislative session, which runs from Jan. 14 to March 14, for consideration in 1999. Meanwhile, Virginia Electric Power Co. plans to introduce legislation in 1998.

OHIO RESTRUCTURING. The Ohio Legislature's Joint Select

Committee on Electric Deregulation has released its report, Competition: Ohio's Choice, which calls for full retail electric competition starting Jan. 1, 2000. For five years, ending Dec. 31, 2004, Ohio would be divided into retail marketing areas. Generation service for all customers in each area would be aggregated and bid out.


STRANDED COSTS. The Massachusetts Supreme Judicial Court has reversed and remanded an order by the state's Department of Public Utilities (now the Department of Telecommunications and Energy) that denied recovery of stranded costs after the Stow Municipal Electric Department "municipalized" and took over facilities of Hudson Light and Power Department to lower rates. The move saddled Hudson with unrecovered costs for buying high-cost power from the Massachusetts Municipal Wholesale Electric Co. State regulators had said that Hudson's rates would decline anyway, whether or not it lost the Stow account, but the court said that ignored the fact that Hudson ratepayers would still pay higher rates with Stow's departure from the system. Stow Mun. Elec. Dept. v. Mass. DPU, Nos. sjc-07350 et al., Dec. 30, 1997 (Mass.) 1997 wl 792398.

COAL BUY-OUT COSTS. An Illinois appeals court has reversed a state commission order that had allowed Central Illinois Public Service Co. and Central Illinois Light Co. to recover coal supply contract buy-out payments through the fuel cost adjustment clause. It said that such cost could not qualify as direct costs of fuel. Archer-Daniels-Midland Co. v. Ill. Commerce Comm'n, No. 3-97-0170, Nov. 24, 1997 (Ill.App.3d.Dist.) 1997 wl