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News Digest

Fortnightly Magazine - March 15 1998

because the reservation fees permit the utility to seek cheaper supplies without an adverse effect on system reliability. Case No. 2772, Dec. 12, 1997 (N.M.P.U.C.).

LOCAL TELCO COMPETITION. The Alabama Public Service Commission reversed an earlier decision and ruled that incumbent local exchange carriers must offer new, special-contract service arrangements (CSAs) for resale at the approved discount rate. Previously, the commission had ruled that the discount would not apply when BellSouth Telecommunications Inc. provided such services. It had said the LEC need only offer the services for resale at the same rates it had arranged with its retail customers. The commission found, however, that if the LECs did not have to offer CSA to resellers at a discount, they could unfairly underprice their competition. It also ruled that a competitive carrier would have the right to review the CSAs filed by the LECs to determine the service offered as well as the price. Docket No. 25677, Dec. 22, 1997 (Ala.P.S.C.).

QUALITY OF SERVICE. The Texas Public Utilities Commission has ordered Entergy Gulf States Inc. to reduce its rates due to poor quality of service to its customers in southeast Texas. This order marks the first time since 1982 that the PUC has levied a service-quality penalty against an electric utility. The penalty could amount to as much as $4 million a year, but will not be distributed to customers until a final order is issued in the rate case filed November 1996.

The PUC also disallowed recovery of $1.453 billion in costs associated with building the River Bend nuclear station. The 2-to-1 vote was in response to a remand order by the Texas Supreme Court after years of litigation over a 1988 PUC decision not to allow recovery of an additional $1.4 billion in River Bend expenses. PUC Chairman Pat Wood dissented, and would have allowed $103 million in rate base. Entergy plans to appeal the decision.

NATURAL GAS PILOTS. The Ohio Public Utilities Commission has approved a stranded cost recovery mechanism for Columbia Gas of Ohio. The approval paves the way for expansion of the utility's natural gas choice pilot program. In the spring, the PUC will review possible expansion of Columbia's customer choice pilot from 170,000 customers to all of its 1.3 million Ohio customers. The settlement provides the opportunity for, but does not guarantee, Columbia's recovery of costs as it opens to competition. The agreement spreads the cost, risk and revenue responsibility among Columbia Gas, competing suppliers, and gas pipeline companies. Columbia will remain at risk for 11 percent of its transition costs. Case Nos. 94-987-ga-air, 96-1113-ga- ata , Jan.7, 1998 (Ohio P.U.C.).

PURCHASED POWER CONTRACTS. Central Vermont Public Service Corp. plans to fight a New Hampshire commission order finding that its subsidiary, Connecticut Valley Electric Co., acted imprudently by not terminating its FERC-authorized purchased power contract with Central Vermont. The Dec. 31, 1997 order directed Connecticut Valley to terminate its power contract with its parent company and seek power based on available market prices. (See, dr 97-241, dr 97-241, Dec. 31, 1997; rehearing granded in part, denied in