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News Digest

Fortnightly Magazine - July 15 1998

case involved LG&E-Westmoreland Southamptons's 62.6-megawatt, topping-cycle cogeneration plant, which sold wholesale power to Virginia Electric Power Co. but had failed to meet FERC operating standards for QFs during 1991 and 1992. Docket Nos. EL94-45- 002 et al., 83 FERC ¶61,182, May 18, 1998.

Congress

NUCLEAR REGULATION. The U.S. House of Representatives Subcommittee on Energy and Power on May 20 held a hearing to examine whether an independent federal body should regulate nuclear facilities now under the auspices of the Department of Energy. DOE has been considering a transition that involves the Nuclear Regulatory Commission as the body that oversees nearly 3,500 nuclear facilities now managed by DOE.

DOE presently is involved in a two-year pilot program at six to 10 DOE sites to determine the desirability of NRC regulatory oversight that would support a decision on whether to seek legislation authorizing NRC legislation at DOE nuclear facilities.

The hearing came two days after Energy Secretary Pena had offered to allow electric utilities with nuclear power plants to defer some payments into the Nuclear Waste Fund. Later, on June 2, Senate Majority Leader Trent Lott (R-Miss.) failed to win the necessary two-thirds vote to limit debate on H.R. 1270, a bill that calls for temporary storage of more than 28,000 tons of radioactive waste now stored at 73 nuclear plants in 34 states. (See, "Waste Bill Dies, Same Fate Seems Certain for DOE Proposal," by Joseph F. Schuler, July 1, 1998, p. 20.)

ENVIRONMENTAL EXTERNALITIES. The Minnesota Court of Appeals affirmed a 1977 order by the state public utilities commission that set avoided-cost values for various air emissions (including carbon dioxide) under a 1993 state law requiring utilities to evaluate environmental externality costs in weighing options for new power plant construction, despite concerns about the reliability of the cost data. The court discouraged the state from "environmentally conscious" planning strategies.

The PUC had set cost values for sulfur dioxide, nitrogen oxide, volatile organic compounds, particulates, carbon monoxide and carbon dioxide, differentiated by geography, with separate values for urban, rural and metropolitan fringe areas. The value for CO2, for example, ranged from $0.30 to $3.10 per ton.

The appeal, filed by the Lignite Energy Council, Western Fuels Association, the State of North Dakota, and various Minnesota electric utilities, argued that "no substantial evidence exists that CO2 causes or contributes to serious environmental damage." In the Matter of Quantification of Environmental Costs, No. CX-97-1391, 1998 WL 248211, May 19, 1998 (Minn.App.).

QF POWER COSTS. A New Jersey Appeals Court has rejected attempts by a group of electric consumers to stop the pass-through of above-market purchased power costs paid by Atlantic City Electric Co. to qualifying cogeneration facilities. It held the Public Utility Regulatory Policies Act preempts state regulators from adjusting purchased power rates retroactively or denying a pass-through of costs under a utility contract with a QF under simply because rates or costs under the contract has risen above market rates. Re Atlantic City Electric Co., 708 A.2d 775, May 1, 1998 (N.J. Super. Ct. App. Div.).

STRANDED COSTS. The Pennsylvania Commonwealth Court rejected claims