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News Digest

Fortnightly Magazine - March 15 1998

1995 state commission order that set up a framework for an experimental retail wheeling program for Detroit Edison and Consumers Power Co. It found no federal preemption or taking of property and held that state statutes conferred implied state authority to mandate transmission access. Detroit Edison Co. v. Mich. PSC, Nos. 187387-88 et al., 1998 wl 20732 Jan. 20, 1998 (Mich. App.).

INTERRUPTIBLE RATES. The Colorado Supreme Court upheld

a decision by the state commission that set electric rates for Public Service Company of Colorado for large commercial and industrial customers who elect discounted interruptible service. Large customers had complained that interruptible rates still subsidized firm service, because the discount was applied against only 80 percent of avoidable costs of peaking capacity, rather than 100 percent, as billed in firm rates. But the court said that larger customers were rarely interrupted and could "earn back" the 20-percent gap as interruptions actually occurred. CF& I Steel L.P. v. Colo. PUC, No. 96sa410, 1997 wl 781229, Dec. 22, 1997 (Colo.).

State PUCs

RETAIL GAS RESTRUCTURING. The California PUC has opened a rulemaking aimed at increasing competition in the state's retail natural gas industry. The PUC hopes to expand benefits already achieved from competitive production supply markets, competitive transportation over interstate and intrastate pipelines, and new tools for managing and hedging gas supply options such as storage services. The PUC will use as a starting point a report from its Division of Strategic Planning, Strategies for Natural Gas Reform: Exploring Options for Converging Energy Markets. r. 98-01-011, Jan. 21, 1998 (Cal.P.U.C.).

MARKETING AFFILIATES. The Iowa Utilities Board closed its

investigation of regulated gas utility involvement in gas brokering activities for their transportation customers. The board found no substantive problems with cross-subsidization of services by smaller customers or with discrimination in favor of the larger users. It added that it found no potential problems significant enough to warrant requiring the utility to stop performing the marketing activities. Docket No. inu-97-1, Jan. 9, 1997 (Iowa.U.B.).

MICHIGAN ELECTRIC RESTRUCTURING. The Michigan Public Service Commission issued electric competition rehearing orders for Consumers Energy and Detroit Edison. By a 2-to-1 vote, the PSC adopted a phase-in schedule allowing 2.5 percent of the customers of both utilities to select electric suppliers by March 31 pending receipt of federal approvals. The PSC found that stranded costs initially should be calculated using a market price of 2.9 cents per kilowatt-hour for 1998. Initial stranded cost estimates are set at $1.8 billion for Consumers Energy and $2.5 billion for Detroit Edison. The PSC noted its continued support for securitization, although legislation is required for implementation. Commissioner John C. Shea filed a dissenting opinion arguing the PSC had acted in excess of its authority. Case No. u-11290, et al. Jan. 14, 1998 (Mich. P.S.C.).

ELECTRIC RATE DESIGN. The California Public Utilities Com-

mission ruled Pacific Gas and Electric Co. cannot implement rate design changes that would bring existing rates closer to marginal costs. A rate freeze under Assembly Bill 1890 requires that rates remain unchanged for large users or decrease for smaller customers until stranded