Many utilities engage in hedging to protect customers from price spikes. But unless regulators are involved in crafting and monitoring these programs, they can turn into speculative ventures that...
270-page rate decision issued by the Vermont Public Service Board granting only $5.48 million of a requested $22 million revenue increase. That award amounts to 3.6 percent on base rates, compared with the utility's original request of 16.7 percent. The board disallowed $5.48 million in power purchase costs under a contract with Hydro-Quebec, by which GMP and 13 other utilities buy power. Christopher L. Dutton, GMP president and CEO, said the ruling "may be devastating." Docket 5983, March 2, 1998 (Vt.P.S.B.) Download at www.state.vt.us/psb/5983gmp.htm.
Moody's Investors Service said it had "increased concerns" over the utility's ability to sustain its present debt rating level (Sr.Sec., Baa2) due to the "negative" rate order.
RATE BASE EXCLUSION. The Connecticut Department of Public Utility Control has ordered Connecticut Light and Power Co. to reduce rates by $141 million to reflect the removal from rate base of the company's Millstone Unit 1 nuclear power plant and other adjustments for imprudent expenses, advertising and amortization payments. The order cuts rates by $110.5 million, through a non-cash write down of deferred taxes and conservation and load management expenses, and offers a $30.5 million "line-item credit" on customer bills for the lost rate base investment. Docket No. 98-01-02, Feb. 25, 1998 (Conn.D.P.U.C.).
(Millstone Unit 1, down for an unscheduled outage, was ruled "not used or useful" late last year. See, Docket No. 97-05-12, Dec. 31, 1997. Units 2 and 3 were to return to service on April 1 and June 1.)
INDEPENDENT SYSTEM OPERATORS. The Wisconsin Public Ser-
vice Commission has denied a proposal by Wisconsin Power and Light Co. to implement its version of an independent system operator, filed by the company as a condition to its planned merger with two Iowa utilities to create Interstate Energy Corp. The PSC instead has directed the utility to file the ISO proposal crafted by Wisconsin Public Power Inc., which the FERC had approved previously. The PSC said that the ISO, as proposed by WPL, would leave too much control of the power lines in the hands of the companies that own the lines. According to the PSC, that could lead to higher electric prices and a less reliable system, which the PSC's ISO standards were designed to prevent. Case No. 6680-um-100, Feb. 24, 1998.
Mike Stuart, General Counsel for WPPI, reported at press time that WPL had declined to file the WPPI ISO plan with the PSC by March 12, as required, and instead had asked the PSC for reconsideration of its order, and had also asked the FERC for an extension of time to file its ISO plan.
NIAGARA MOHAWK RESTRUCTURING. The New York PSC approved a revised restructuring plan (PowerChoice) for Niagara Mohawk Power Corp. that will allow all customers to choose their energy supplier by 1999 and will save about $2 billion over the next five years. The ruling marks the last approval of a restructuring plan for an investor-owned utility in New York and will cut rates for (1) residential and small commercial and (2) industrial and large commercial customers by 3.2 percent and 25 percent,