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News Digest

Fortnightly Magazine - February 15 1998

731547.

TELCO PRICE-CAP PLANS. Reversing an order by the state's Commonwealth Court, the Pennsylvania Supreme Court has in effect reinstated a 1994 state PUC order that approved a price-cap plan for Bell Atlantic-Pennsylvania, with the cap keyed to the rate of inflation minus a 2.93 percent offset for productivity. The lower court (669 A.2d 1029) had said the PUC lacked evidence to find that certain services were competitive, and had required the PUC to adjust the offset by an "input price differential" to reflect alleged cost differences between the telecommunications industry and the economy as a whole. Popowsky v. Pa. PUC, Nos. 101 et al., Dec. 24, 1997 (Pa.) 1997 wl 786906.

Business Wire

CMS Energy will begin an experimental pilot program allowing up to 300,000 natural gas customers to chose their gas suppliers over the next three years. According to CMS, the gas choice plan is the largest and most far-reaching of its kind.

Energis Resources has secured more than 700 new business customers since the beginning of the Pennsylvania Pilot Program. Energis Resources, a subsidiary of Public Service Enterprise Group Inc., was one of 43 electric generation suppliers licensed to participate. The company's new business customers translate into more than 350 million kilowatt-hours in sales.

Electric Lite signed a deal with Illinova Energy Partners to purchase power for its customers in Portland General Electric's pilot program. Electric Lite enrolled nearly 1,500 customers and began delivering power on Dec. 1, 1997. The power supply agreement is a fixed-price, full-requirements contract. Illinova will serve as Electric Lite's scheduler.

El Paso Field Services, a business unit of El Paso Energy Corp., purchased a natural gas gathering and processing system for $196.5 million from TPC Corp., a wholly owned subsidiary of PacifiCorp.

Air Products and Chemicals Inc. signed two, multi-year contracts to provide on-site gas management services to the LaPorte, Texas E.I. du Pont de Nemours and Co. plant and the Chaulk River Atomic Energy Canada Limited Facility. Services include placing Air Products employees at both customers' sites to assume responsibility for the facilities' industrial and specialty gas requirements, daily deliveries, logistical support and key administrative operations.

Madison Gas and Electric Co. issued a request for proposal for construction of up to 100 megawatts of electric capacity to be provided by a new power plant. MGE is promoting construction of a single, 500-MW unit.

State PUCs

POWER CHOICE PLANS. The Michigan commission approved

plans by Consumers Energy Co. and Detroit Edison Co. to allow all customers to choose electric suppliers, as required under the PSC's 1997 restructuring ruling, which requires a phase-in through 2001. The PSC directed the utilities to use a bidding process to recover stranded costs and to allocate open-access load among participating

customers during the phase-in. Bid rules must contain a mandatory minimum bid requirement of 0.5 cents per kilowatt-hour for transition cost recovery. It also authorized the electric utilities to suspend their existing power supply cost-recovery mechanisms during the retail access phase-in period. Case Nos. u-11451, u-11452 (direct access plans), u-11449, u-11453 (power supply adjust.), Oct. 29, 1997 (Mi.P.S.C.).

STRANDED-COST