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News Digest

Fortnightly Magazine - April 1 1998

Power, said Feb. 3, that the EPA disregarded recommendations of the 37-state Ozone Transport Assessment Group. The group had suggested a range of emission reductions (em from 55 percent to 85 percent (em instead of an "onerous one-size-fits-all" approach.

Utilities, labor groups, and other organizations from the regions that the plan would affect have formed the Alliance for Constructive Air Policy, a coalition that will work with policymakers to find methods to reduce ozone pollution. ACAP members are developing an alternative proposal to EPA's proposal.

The EPA's plan, proposed in November 1997, would require uniform NOx emissions reductions of 85 percent by utilities and other large sources in 22 states in the Midwest, Mid-Atlantic, Southeast and Great Lakes regions.

FERC

GAS PRODUCER REFUNDS. The FERC on Jan. 28 again ruled that natural gas producers must refund to customers approximately $500 million for gas produced in Kansas and sold interstate at rates that included Kansas ad valorem or property taxes. In denying rehearing, the FERC noted that such taxes are not eligible for inclusion in rates under the Natural Gas Policy Act of 1978. Last fall the FERC had ruled that a court ruling left it no choice but to order the refunds. Amoco Production Co., Anadarko Petroleum Corp., Mobil Oil Corp., OXY USA Inc., and Union Pacific Resources must refund the money by mid-March, which the companies claim will produce financial hardship. Legislation introduced in both the U.S. Senate and House of Representatives would require the producers to pay only the principle owed (em not the interest, which makes up nearly 80 percent of the $500 million. Docket Nos. rp97-369-001 et al., Jan. 28, 1998 (F.E.R.C.).

PIPELINE RATEMAKING. While it has issued a certificate to Transcontinental Gas Pipe Line Corp. for construction and operation of its Mobile Bay, Ala., offshore lateral, the FERC nevertheless has denied rehearing of a prior order that approved rolled-in rates instead of incremental pricing. Docket Nos. cp97-92-000, et al., Jan. 28, 1998 (F.E.R.C.).

Transco had argued that it qualified for a presumption of rolled-in rate treatment under the commission's statement of policy on pipeline pricing. See, 71 FERC ¶ 61,241 (1995), order on reh'g., 75 FERC ¶ 61,105 (1996).

Courts

STRANDED COSTS. The New Mexico Supreme Court examined whether state law gives the city of Las Cruces authority to condemn facilities owned by El Paso Electric Co. This issue had been certified to the state Supreme Court by Judge Leslie Smith of the U.S. District Court and the issue has been returned to Judge Smith's court for a final determination. City of Las Cruces v. El Paso Electric Co. et al., No. 23,846, Feb. 10, 1998 (N.M.)

Meanwhile, the Federal Energy Regulatory Commission on Feb. 12 held a hearing to determine how much, if any, stranded costs the city would owe El Paso Electric if it takes over the electric system. Docket No. sc-97-2-000 (F.E.R.C.).

PURCHASED POWER CONTRACTS. The owners of two waste-to-energy generating plants filed a $1.8-billion lawsuit in Palm Beach County Circuit Court against Florida Power & Light Co., alleging contract violations in a dispute