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News Digest

Fortnightly Magazine - July 1 1998

some of the circumstances presented by historical transmission agreements, some dating as far back as the 1960s. NSP asserted that in some instances customer credits could equal or exceed the network rates that otherwise would be billed.

The FERC agreed that section 30.9 was not intended to be the foundation for joint transmission arrangements. But it also noted that NSP "created this untenable situation by negotiating settlements promising something that was not required under the pro forma tariff." Docket Nos. OA97-25-000 et al., April 29, 1998.

GAS PIPELINE NOMINATIONS. The FERC adopted rules to improve the efficiency of the interstate natural pipeline grid. The final rule establishes uniform policies to make it easier for shippers to move gas across multiple pipelines. The rules require uniformity by June 1, 1999.

Pipelines must adopt Version 1.2 of the Gas Industry Standards Board standards and post information on pipeline Web sites. Docket No. RM96-1-007, Order No. 587-G, April 25, 1998.

State Legislation

ELECTRIC RESTRUCTURING. Connecticut Gov. John Rowland (R) signed electric restructuring legislation that guarantees a 10-percent rate cut on Jan. 1, 2000, while allowing for securitization and recoveyr of stranded costs. Choice of electric supplier will being for 35 percent of customers in "distressed cities" as chosen by the Connecticut Department of Public Utility Control. All other customers of both major electric utilities in the state--Northeast Utlities and United Illuminating Co.--will have choice July 1 that year. Municipal utilities aren't affected by the law unless they choose to compete. The law, signed April 29, requires divestiture of electric generation. The utilities, however, will be allowed to bid on their own plants.

PECO ELECTRIC RESTRUCTURING. The Pennsylvania PUC issued a final order approving a settlement of PECO Energy Co.'s restructuring plan. The order also allows the utility to recover $5.26 billion in stranded costs. Lastly, it resolves 15 pending appeals before the Commonwealth Court and one appeal before the U.S. District Court.

The final order guarantees all customers an 8-percent rate cut in electric bills in 1999, and a 6-percent cut in 2000. In addition, PECO customers will receive a "shopping credit" for two years with which to seek out competitive power supplies - 5.09 cents per kilowatt-hour for residential customers, or 4.46 cents per kWh on a system average basis, varying by rate class.

A third of PECO's customers can switch suppliers on Jan. 1, 1999, another third on the same day in 2000, and the rest on Jan. 2, 2000. But on Jan. 1, 2001, 20 percent of all PECO Energy customers will be assigned to a competitive provider of last resort/default. The default supplier will be selected through competitive bidding, and will have to provide 2 percent of its energy from renewable sources. Pennsylvania is the first state to provide for a competitive default supplier, although customers are free to return to PECO.

PECO may collect the $5.26 billion in stranded costs from Jan. 1, 1999 through 2010, but may only securitize $4 billion of that amount. r-00973953, p-00971265, May 14, 1998 (Pa.P.U.C.).

HOURLY ENERGY PRICING. Commonwealth Edison on May 1 asked