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News Digest

Fortnightly Magazine - September 1 1998

98-190, May 5, 1998 (Ore.P.U.C.).

LOCAL PHONE COMPETITION. The New Jersey Board of Public Utilities has allowed U S West Interprise America, Inc. to provide local and interexchange telephone service (by purchasing transport services) to compete with Bell Atlantic-New Jersey, the state's dominant local exchange carrier. Docket No. TE97090641, May 6, 1998 (N.J.B.P.U.).

GAS PROCUREMENT. The Arizona Corporation Commission has authorized Southwest Gas Corp. to make permanent its two-year-old pilot program under which it shares pipeline capacity to purchase lost-cost gas supplies on the spot market outside the area traditionally served by the El Paso Natural Gas Co. pipeline system. Docket No. G-01551A-98-0184, Decision No. 60905, May 22, 1998 (Ariz.C.C.).

Mergers & Acquisitions

DOMINION + MIDLANDS. Dominion Resources Inc., the parent company of Virginia Power, has sold East Midlands Electricity plc (a regional distributor operating in the United Kingdom) to London-based PowerGen plc. According to Thomas E. Capps, chairman, president, and CEO of Dominion Resources, "We've been frustrated in our ability to grow our assets in the U.K. When you can't grow, you're better off taking out the capital and redeploying it into assets that you can grow."

AT&T + TELEPORT. The California Public Utilities Commission has authorized the merger of AT&T Corp., and Teleport Communications Group Inc., combining several TCG and AT&T subsidiaries operating in the state as competitive local and interexchange carriers (including wireless services). The application was unopposed. Application 98-02-001, Decision 98-05-022, May 7, 1998 (Cal.P.U.C.).

BC + SNET. The North Carolina Utilities Commission has approved the merger of SBC Communications Inc., parent company of Southwestern Bell, Pacific Bell, Nevada Bell, and Southern New England Telecommunications Corp., Connecticut's largest telecommunications carrier, which offers intrastate interexchange services in North Carolina as a reseller. Re SBC Communications Inc., Docket P-473, Sub 1, June 12, 1998 (N.C.U.C.).

WORLDCOM + MCI. The New Jersey Board of Public Utilities has approved the merger of WorldCom Inc. with MCI Communications Corp., noting that the two applicants faced competition from various carriers operating in the state and had forecasted continued growth following the merger, with about 10,000 jobs nationwide. Docket No. TM97120882, April 29, 198 (N.J.B.P.U.).

DUQUESNE + ALLEGHENY. Duquesne Light Co. announced that it will terminate its proposed merger with Allegheny Energy Co. (the holding company of several other regional utilities, including Monogahela Power Co., Potomac Edison Co., and West Penn Power) due to unfavorable stranded cost and independent system operator rulings made by the Pennsylvania Public Utility Commission.

Allegheny disagrees and plans to pursue the merger.

Under the state's electric restructuring legislation, Duquesne was granted $1.3 billion out of a $1.9-billion stranded cost recovery request. Allegheny's subsidiary, West Penn, was granted $525 million out of a $1.5-billion request. The PUC also required as a condition of merger approval that the utilities join a fully functional ISO and take steps to alleviate market power concerns, including the sale of generation assets. Docket No. A-110150F0015, April 30, 1998; Docket No. G-00970574 (L-69) June 29, 1998 (Pa. P.U.C.)

To win approval from the commission, the newly merged company must become a member of a fully functioning independent