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News Digest

Fortnightly Magazine - October 15 1998

by the utility Consumers Power Co., but that any sales the affiliate makes will not count as part of the limited capacity reserved to competitors, or otherwise displace participation in the pilot by unaffiliated competitors, even though the affiliate will not sell power purchased from the utility. Case No. U-11485, July 24, 1998 (Mich.P.S.C.).

n On the gas side, the Virginia State Corporation Commission has authorized Washington Gas Light Co. to permit its affiliate, Washington Gas Energy Services Inc., to participate in its pilot program for retail choice, provided that WGL administers the program equally between the affiliate and unaffiliated competitors. Like other suppliers in the pilot, WGES may elect to use the WGL's capacity on upstream interstate pipelines to arrange deliveries of gas supplies to end users. Case No. PUA980005, July 15, 1998 (Va.S.C.C.).

CORPORATE GOODWILL. In adopting rules governing utility affiliates and non-core activities, the Maine Public Utilities Commission will require utility marketing affiliates to reimburse utilities over a three-year period for the value of corporate goodwill. At that time, the PUC will reassess goodwill value and if needed, it will require a second three-year period for affiliates to pay down all goodwill, by which time the asset value must reach zero. Docket No. 97-886, July 7, 1998 (Me.P.U.C.).

METERING AND BILLING. The Maine Public Utilities Commission has proposed two options concerning metering, billing and collections for interactions between electric utilities and competitive suppliers of generation services. The two options are: (1) "complete billing," whereby the utility provides one monthly bill for transmission, distribution, and generation and (2) "pass-through billing," where the utility provides one monthly bill for delivery and the generator provides another bill for its services. Docket No. 98-482, July 6, 1998 (Me.P.U.C.).

The PUC also has adopted a final rule that requires electric utilities to issue bills that break out the cost of capacity, electricity, transmission and distribution charges and other charges for electric service. The rule requires unbundling of only an "illustrative electric supply rate." Customers would see the cost of the portion of electric service that will be available competitively in the future. The rule does not require unbundled bills to contain substantial amounts of new information. Docket No. 98-306, June 30, 1998 (Me.P.U.C.).

ELECTRIC RATE CUTS. The Virginia Corporation Commission on Aug. 7 approved a rate case settlement directing Virginia Power Co. to grant more than $700 million to customers in refunds and rate cuts, marking the largest such order in Virginia history.

An immediate, one-time refund of $150 million within 90 days of the order will provide an average credit of $53 to residential customers. Then, in a two-phased rate cut, the utility will reduce rates by $100 million retroactive to March, which translates into a rate cut of about $2.30 per month, with an additional $50 million cut starting March 1, 1999. Also, rates cannot be raised again until March 1, 2002. Virginia Power will write-off $220 million in regulatory assets over a four-year period.

UNIVERSAL SERVICE FUNDS. The California Public Utilities Commission adopted $305.2 million in rate reductions for basic residential