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News Digest

Fortnightly Magazine - July 15 1998

that sections of the state's electric restructuring law allowing recovery of stranded costs are unconstitutional, thus denying an appeal by Indianapolis Power and Light Co., which had challenged a "qualified rate order" issued by the Pennsylvania Public Utility Commission in 1997, allowing PECO Energy to recover a portion of its stranded costs.

IPALCO, as an owner of out-of-state generation, had argued that stranded cost recovery could help subsidize PECO in interstate power markets, thus violating the Commerce Clause. The court ruled, however, that the law actually promoted interstate commerce by opening the state's electric markets and inviting out-of-state suppliers to compete for retail sales. IPALCO v. Pa. PUC, No. 1597 C.D. 1997, 1998 WL 223225, May 7, 1998 (Pa.Comm.Ct.).

Studies & Reports

NUCLEAR RISK/GAS DEMAND. The INGAA Foundation claims that the natural gas industry should prepare to meet the need for new power generation from the anticipated shutdown of nuclear plants in Canada, New England, and the Midwest.

The May 13 report, produced by the Washington International Energy Group, finds a potential demand for up to 550 billion cubic feet per year of natural gas as a replacement fuel for nuclear generation, requiring further expansion of pipeline capacity in the Midwest and Northeast. (For copies of Need for Natural Gas Increases With More Nuclear Plant Shutdowns, contact Linda Thomas at 202-216-5900.)

GAS TRANSPORTATION RATES. The Gas Research Institute released Pipeline Markets in Transition: Cost Impacts of FERC Order 636, which finds that natural gas transportation charges are likely to continue declining for most pipeline customers. Contributing factors include the end of FERC Order 636 transition costs and take-or-pay liabilities, an increase in pipeline load factors, and use of incentive rates on portions of the transmission grid. The May 14 study also examines how pricing of interstate pipeline services could affect gas commodity prices. (GRI Document No. GRI-97/0374. For copies, contact Val Megginson at 703-526-7832.)

NUCLEAR POWER. The Nuclear Energy Institute (NEI) on May 19 unveiled its policy blueprint, "Nuclear Energy: 2000 and Beyond, A Strategic Direction for Nuclear Energy in the 21st Century," which promotes nuclear power to ensure fuel diversity and reduce harmful air emissions. (To obtain a copy contact Lawanne Stewart, NEI, tel. 202-739-8148.)

News Digest is compiled by Lori A. Burkhart and Phillip S. Cross, contributing legal editors, and by Beth Lewis, editorial assistant.

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