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News Digest

Fortnightly Magazine - May 15 1998

revenues produced by LIPA's utility business would not be subject to federal income taxes.

OPEN-ACCESS TRANSMISSION. The Salt River Project filed a voluntary open-access transmission tariff at the FERC, supplementing its compliance with comparability standards and ensuring its ability to obtain transmission service from other utilities. The tariff also contains standards of conduct outlining the functional separation of wholesale merchant and affiliate activities from transmission and reliability. (New West Energy Corp., a Salt River subsidiary, was formed to sell excess capacity outside the parent's service territory.) FERC Order 888 allows public power companies voluntarily to submit open-access transmission tariffs to the FERC.

State PUCs

CONSUMER DISCLOSURES. Effective Jan. 1, 1999, the Illinois

Commerce Commission will require electric utilities and alternative power suppliers to provide consumers with data broken down by percentages according to the fuel source for power generation, whether biomass, coal, hydro, natural gas, nuclear, oil, solar or wind. They also must supply a chart listing emissions of carbon dioxide, nitrous oxides and sulfur dioxide, plus nuclear waste attributable to fuel sources. No. 98-0094, March 11, 1998 (Ill.C.C.).

UTILITY MARKETING AFFILIATES. Regulators in Maryland,

Maine and California set rules governing marketing affiliates of energy utilities, in each case distinguishing between "core" activities, such as energy sales (common both to utilities and affiliates) and "non-core" endeavors, such as kitchen remodeling or appliance repair.

In Maryland, rules for core affiliates bar joint sales calls or promotions and require utilities and affiliates to operate from separate locations. Noncore standards simply bar any preferences linked to unregulated services. Cooperatives and small utilities get no exemption. The PSC adopted a fully distributed cost method to allocate expenses and assets between utilities and affiliates. Case No. 8747, Order No. 74038, Feb. 23, 1998 (Md.P.S.C.).

In Maine, a provisional rule covering noncore activities mandates structural separation between utilities and affiliates. The PUC will require a fully distributed cost allocation between core and noncore services, but market pricing to evaluate asset transfers. Ratepayers are guaranteed the value of intangible assets and corporate goodwill. The rule also covers cost allowances for water utility payments to affiliates. Docket No. 97-886, Feb. 18, 1998 (Me.P.S.C.).

In California, new standards of conduct will apply only to transactions with affiliates who offer a product or service for a form of energy that the utility itself provides, but will allow the shared use of the utility's corporate name and logo, with a public disclaimer. r.97-04-011, i.97-04-012, d.97-12-088, Dec. 16, 1997 (Cal.P.U.C.).

CUSTOMER-OWNED GENERATION. The New York Public Ser-

vice Commission set terms for utility tariffs required under a new state law permitting residential electric users to install photovoltaic generation units sized at not more than 10 kilowatts. The law allows customers to interconnect with the utility grid and get backup power when needed at tariffed residential rates, plus a credit at the same tariffed rate when PV output exceeds need (net metering). The plan caps total PV production at 0.1 percent of each utility's electric demand. The PSC rejected calls by utilities for guaranteed recovery of revenue lost under net metering, noting that other similar