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News Digest

Fortnightly Magazine - September 1 1998

and will begin in November to phase-in a pilot program for choice for smaller customers. In the first phase, 5 percent of the utility's residential, commercial and irrigation customers will be eligible. If the pilot runs smoothly, the PSC will expand choice by another 5 percent of small-volume customers in June 1999, and by 10 percent in August 1999 and each month thereafter until all customers are eligible for choice by April 2000. Order No. 5986d, June 23, 1998 (Mont.P.S.C.).

GAS RETAIL CHOICE. The Georgia Public Service Commission on June 25 voted to open the state's natural gas markets to competition in response to last November's filing by Atlanta Gas Light Co. The PSC called for a new rate design for Atlanta Gas Light services that will levelize customer delivery costs through the year. It will cut rates by $7 million a year, allow market-based rates for interruptible gas sales and drafts guidelines on how the system will operate under competition. Before the vote, members of the PSC had said they expected Atlanta Gas Light to ask for reconsideration because of the complexity of the issues.

RETAIL WHEELING. The Iowa Utilities Board ruled that electric utilities in the state may lawfully decline requests by retail customers to wheel power purchased from another supplier. It also found "no substantive distinction" between direct access or retail wheeling and "buy-sell" transactions undertaken at the direction of a customer where the utility is simply an intermediary providing transmission and distribution. MidAmerican Energy Co. had asked the board to address the issue after one of its retail customers demanded direct access to a competitive energy supplier. The board said that existing state laws setting up exclusive electric service territories covered commodity sales as well as transmission and distribution. Docket No. DRU-98-1, May 29, 1998 (Iowa U.B.).

CREAM SKIMMING. "Cream skimming" by new competitors might force incumbent telephone carriers to trim profit margins and operate more efficiently, according to the Minnesota Public Utilities Commission, in adopting rules to guide local phone competition in smaller, rural areas. The PUC rejected attempts to require competitive carriers to serve the entire service territory of an incumbent carrier and to preempt efforts to serve only the lowest-cost, most-lucrative customers. It added that it could find no evidence that competitive carriers were "flocking to rural areas and harming rural ratepayers." Docket No. P-999/R-97-608, May 12, 1998 (Minn.P.U.C.).

ELECTRIC-TO-GAS DIVERSIFICATION. The Maine Public Utility Commission approved a plan by Central Maine Power Co. to reorganize under a holding company structure to help it enter the natural gas distribution business as part of a joint venture with New York State Electric and Gas Co. To protect ratepayers, the commission imposed a cap of $240 million (about 20 percent of post-divestiture total book capitalization) on the amount the utility could invest in non-utility activities, including the natural gas venture. Northern Utilities Inc., the state's only operating gas distributor, has intervened in a second case to present evidence on CMP expansion in towns it does not serve but is authorized to serve. Docket No. 97-930 (reorganization) May