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News Digest

Fortnightly Magazine - April 1 1998

service and that the form and extent of changes in the state's electric industry structure were not yet certain. It also rejected claims by the IPPs that the company's plan was flawed because the need for power could be satisfied at a lower cost through the construction of combustion turbine units by competitive suppliers. It said that such an analysis failed to consider the need to minimize the "total cost" of generation by balancing the amounts of peaking, intermediate and baseload capacity. Docket No. 26115, Dec. 12, 1997 (Ala.P.S.C.).

TELCO/CABLE CROSS-SUBSIDY. The Michigan Public Service Commission directed Ameritech Michigan, a local exchange carrier, to stop participating in a marketing program with an affiliated cable television company, Ameritech New Media Inc. Other cable providers in the state had complained that Ameritech violated state law by offering checks to prospective customers redeemable for telephone service as an inducement to subscribe to New Media's "Americast" cable service. The PSC ruled that the issuance of the pre-signed, pre-dated "AmeriChecks" by the LEC, while drawn on a New Media Bank account, violated state rules banning provision of regulated service "in combination with an unregulated service." It rejected claims by the LEC that the law did not apply because the promotion involved "different corporate entities" and found that the opportunity for customers to use AmeriChecks as a discount or offset against tariffed rates for regulated services "cemented the ties creating a combination of regulated and unregulated services." Case No. u-11412, Dec. 19, 1997 (Mi.P.S.C.).

ELECTRIC RATE RESTRUCTURING. The Arkansas Public Service

Commission has authorized Entergy Arkansas Inc. to restructure its rates in anticipation of competition, permitting the utility to reduce rates and increase the pace of amortization for its nuclear generating investment. It added that it "expects the utility to¼ actively promote retail electric competition in Arkansas."

The approved rate restructuring plan includes: (1) rate reductions of $155 million in 1998 and $62 million beginning in 1999; (2) rate design moves to eliminate interclass subsidies without rate increases; (3) rate stability until July 1, 2001; (4) ratepayer protection against rate increases associated with loss of wholesale load; and (5) the capture of excess annual earnings and the earmarking of such funds for payment of potential future ratepayer liability for stranded costs. Docket No. 31, Dec. 12, 1997 (Ark.P.S.C.).

CUSTOMER AGGREGATION. Enron Energy Services has filed

a complaint with the state Ohio PUC challenging as "uncompetitive" a proposed long-term aggregation contract for Ohio Edison Co. to supply several McDonald's restaurants with electricity. Ohio Edison is proposing to give McDonald's a discounted electric rate in return for becoming the exclusive supplier for 10 years. Ohio Edison, a subsidiary of FirstEnergy Corp., has filed suit in the Ohio Supreme Court challenging the PUC's aggregation plan.

PUBLIC POLICY PROGRAMS. The New York Public Service Commission on Feb. 2 issued an order establishing policies for the administration of its Systems Benefits Charge, which will be used to promote energy efficiency and public policy programs during the transition to competition. The order designates the New York Energy Research and Development Association as a third-party