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News Digest

Fortnightly Magazine - March 1 1998

local exchange telephone carriers to competitive carriers. For unbundled network services, the board adopted the same principles underlying the total element long-run incremental cost method used by the Federal Communications Commission. It said the TELRIC method will reduce the incumbent LEC's ability to engage in anticompetitive behavior. The BPU set the wholesale discount at 17.04, for resellers using Bell Atlantic of New Jersey with operator service and at 20.03 percent without. Docket No. tx95120631, Dec. 2, 1997 (N.J.B.P.U.).

TELECOM REVENUES. The New Jersey Board of Public Utili- ties approved a plan by Jersey Central Power and Light Co. to offer fiber-optic and other telecommunications services to carriers through a corporate affiliate, but said that revenues from the arrangement should be used to reduce stranded costs rather than applied as a reduction to transmission and distribution revenue requirements. Docket No. ee97050350, Dec. 17, 1997 (N.J.B.P.U.).

TELCO PRICE CAPS. The Maine Public Utilities Commission

decided not to modify its price-cap plan for New England Telephone and Telegraph Co. to account for revenue changes that occur when customers migrate between service offerings as prices are raised and lowered under an index-rate mechanism. The commission concluded that the LEC should bear all the risks and reap all the benefits from its conscious choice to reduce some rates more than others. A method to shield the utility from such risk is inappropriate under incentive regulation, the PUC said. Docket No. 97-079, Nov. 25, 1997 (Me.P.U.C.).

Courts

PILOT PROGRAM REFUNDS. The Ohio Supreme Court ruled state regulators cannot order refunds of charges levied under a weather normalization program run by Columbia Gas of Ohio to levelize customer bills. However, consumer response to the experiment was negative due to higher-than-expected bills during an unusually warm winter when the program began. Some customers said the company had mislead them and had reaped a windfall. The court ruled the commission lacked authority to order refunds of rates paid under approved schedules. Lucas County Comm'rs v. Ohio PUC, 686 N.E.2d 501, Dec. 3, 1997 (Ohio).

APPLIANCE REPAIR SERVICE. The Iowa Supreme Court upheld a recently enacted state law prohibiting public utility companies from using rate-supported assets or employees in the provision of non-utility appliance repair and installation activities. The existing code had only required that a public utility should provide services to non-utility affiliates in a manner that "minimizes cross-subsidization or unfair competitive advantage." The court found that the additional restriction was a legitimate attempt by the state to place state utilities on a level playing field with other contractors providing similar services. UtiliCorp United Inc. v. Iowa Utils. Bd., 570 N.W.2d 451, Nov. 26, 1997 (Iowa).

Lori A. Burkhart and Phillip S. Cross are contributing legal editors and Beth Lewis is editorial assistant.

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