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News Digest

Fortnightly Magazine - May 15 1998

reductions in usage (lifestyle changes, conservation, efficient appliances, etc.) don't warrant compensation. Case No. 97-e-1951 et al., Feb. 11, 1998 (N.Y.P.S.C.).

ELECTRIC COMPETITION. The Delaware Public Service Commission issued a report to the state legislature finding electric competition both "inevitable and desirable." Utilities would file unbundled rates, restructuring plans and stranded cost estimates and would serve as default providers of generation under regulated, but "market-based" tariffs during a transition period. The PSC recommends only functional separation of generation from regulated services but asks lawmakers for authority to mandate structural separation if cross-subsidies are found. Docket No. 97-229, Jan. 27, 1998 (Del.P.S.C.).

PURCHASED POWER COSTS. Green Mountain Power Corp. has filed with the Vermont Public Service Board a motion to reconsider its 270-page rate decision issued March 2, granting $5.48 million of a requested $22 million revenue increase. The award represents 3.6 percent on base rates. The board disallowed $5.48 million under a purchased power contract with Hydro-Quebec. According to Christopher L. Dutton, GMP President and CEO, the ruling "may be devastating." He said the utility was analyzing the accounting and credit rating implications of the decision, "but we know already that they could be severe." If necessary, GMP will appeal any future decision to the Vermont Supreme Court. Moody's Investors Service said it has "increased concerns" over the utility's ability to sustain its present debt rating level (Sr.Sec. Baa2) due to the "negative" rate order. Standard & Poor's placed its rating of GMP on CreditWatch with negative implications. Docket No. 5983, March 2, 1998 (Vt.P.S.B.).

SYSTEMS BENEFITS CHARGE. The New York Public Service

Commission set rules for using a systems benefit charge to fund public policy programs in a restructured electric industry. The charge would fund only (1) approved research and development related to energy service, storage, generation, the environment and renewables; (2) pilot programs for energy management for low-income customers; and (3) environmental protection that exceeds compliance with current law and regulations. The plan sets funding levels and benefits charges for a three-year transition period. To ensure fairness the PSC designated the New York Energy Research and Development Authority as an independent administrator for the statewide program. Case No. 94-e-0952, Opinion No. 98-3, Jan. 30, 1998 (N.Y.P.S.C.).

ELECTRIC DISTRIBUTION LINES. Citing success under a two-year pilot program, the California Public Utilities Commission will allow builders and contractors to design lateral distribution facilities and line extensions on private property for residential gas and electric customers.

A second ruling permits free allowances for the cost of transformers, meters, regulators and services but only to the extent that the net revenues (distribution function only) from expected load matches utility investment. Commissioner Jessie Knight praised the rulings as "the first tentative steps toward allowing distribution competition." r.92-03-050, Decisions 97-12-098, 97-12-099, Dec. 16, 1997 (Cal.P.U.C.).

YELLOW PAGES REVENUES. Initiating a three-year rate freeze,

the Utah Public Service Commission has continued its policy of imputing yellow pages revenues to U S West Communications Inc., to account for assets transferred in 1984 to a directory publishing affiliate. It denied claims that the practice would impede local telephone competition