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News Digest

Fortnightly Magazine - March 15 1998

FERC

MOTHBALLED PLANT. The FERC on Jan. 14 amended cer-

tain power sales contracts of Maine Yankee Atomic Power Co. to reflect the mothballing of the utility's nuclear generating plant (Docket No. er98-570-000). The amendment affects electricity resale to 10 New England utilities and will boost annual wholesale rates by $21.5 million (an amount subject to refund). Twenty-eight publicly owned electric systems that have contracts with Maine Yankee protested the rate increase. The FERC ordered a hearing on Maine Yankee's decision to shut down the unit, the revised decommissioning charges and other cost items.

POWER MARKETING ADMINISTRATIONS. The Department of

Energy's Southwestern Power Administration and the Western Area Power Administration filed their open access transmission tariffs at the FERC. "The Department of Energy has strongly supported wholesale open access," said Deputy Energy Secretary Elizabeth Moler. "Bonneville Power Administration has filed an open access tariff already. With these two filings, all of the PMAs that have transmission will have open access tariffs on file with FERC." The tariffs are expected to become effective at the beginning of February. Although the PMAs are not subject to FERC's Order 888, the tariffs are consistent with Order 888 to the extent possible.

Generating Plants

NUCLEAR PLANT CLOSING. Commonwealth Edison has announced that it will permanently close its Zion nuclear power plant in northern Illinois. The move marks the largest nuclear plant shut down ever in the United States. Management believed that the 2,080-MW Zion would not remain competitive in a restructured electric industry.

Moody's Investors Service has confirmed the ratings of ComEd ('Baa2' senior secured), noting that while the utility will incur relatively high replacement power costs due to a tight purchased power market in the Midwest, that the shutdown eliminates ongoing and potentially increasing expenditures associated with bringing back and operating a "marginal" plant. But Moody's said the rating outlook remains negative for ComEd.

Courts

PECO RESPONSE. PECO Energy Co. on Jan. 21 filed suit in U.S. District Court in Philadelphia challenging the PUC's December 1997 order imposing its own restructuring plan on the utility and shaving $1 billion off its $6-billion stranded cost recovery request. PECO claims the Pennsylvania Public Utility Commission has taken its property without just compensation. It said the PUC has exercised jurisdiction over matters, such as transmission service and rates, that are within exclusive jurisdiction of the federal government. On Jan. 22, PECO Energy filed a similar appeal in the state commonwealth court in Harrisburg. PECO Energy v. Pa PUC, Docket 245 cd 1998.

CLASS-ACTION REFUND SUIT. Two consumer groups representing 1.5 million Michigan residents filed suit in Ingham County against Detroit Edison. The groups are suing the company for $3.48 billion. In November 1997, Michigan Public Service Commission reduced a required $53.4 million customer refund by $15 million. The consumer groups claim the reduction amounts to a breach of contract and are suing for the entire $3.48 billion that had been paid to the utility in the form of increased rates over the life of the original settlement.

STATE WHEELING AUTHORITY. The Michigan Court of Appeals has affirmed the