The Federal Energy Regulatory Commission (FERC) has agreed to set a hearing on the reasonableness of American Electric Power Co.'s (AEP) nonfirm, offpeak hourly rate for electric transmission...
of the 160-year-old Edwards dam on the Kennebec River in Augusta, Maine (em the first such order directed against the wishes of the dam owner (em and approved a settlement agreement to carry out the move.
Hébert, not yet on the bench when the 1997 order was issued, questioned the FERC's legal authority. Massey, who had voted for decommissioning, questioned Hebert's use of terms such as "disingenuous" and "intellectually dishonest" to describe the majority's ruling.
Vicki Bailey (who had dissented in 1997) voted to grant the settlement because the parties wanted it, but added, "I remain unwilling to assume we have authority to order removal." She added that the Secretary of the Interior had congratulated the FERC after the 1997 order, concerned that other agencies might expect a series of dam removal orders from the FERC. That led Chairman James Hoecker to observe, "Bruce Babbitt does not vote at this commission." Docket Nos. P-2389-030 (approving settlement on dam removal), Docket Nos. P-2389-034, P- 2389-027 (denying motion to vacate 1997 order), Sept. 16, 1998 (F.E.R.C.).
Unbundled Transmission. Reversing a 10-year-old initial decision, and denying jurisdiction claimed by Oklahoma regulators, the FERC has asserted authority over unidirectional electric sales wheeled from a rural cooperative to a Native American tribal authority in the same state, claiming authority over unbundled retail transmission. Docket Nos. ER90-54-001 et al., Opinion No. 426, Sept. 16, 1998 (F.E.R.C.).
Gas Pipeline Certification. In denying rehearing of its 1997 preliminary determination, the FERC has issued final authorization (subject to environmental compliance) for the 886-mile U.S. segment of the planned Alliance natural gas pipeline project, to carry gas from the Canadian border with North Dakota to the Chicago area.
It denied claims by Natural Gas Pipeline Co. that the Alliance project represented "wasteful construction," duplicating capacity Canadian pipeline routes. Alliance got a boost on August 19 when sponsors for the Viking Voyageur pipeline withdrew their application for certification, mooting concerns of regulators in Minnesota and Wisconsin. Docket Nos. CP97-168-000, 84 FERC ¶61,239, Sept. 17, 1998.
Mergers and Acquisitions
Allegheny + DQE. The Federal Energy Regulatory Commission has identified concerns about potential market power for the proposed merger between Allegheny Energy, Inc. and DQE, Inc., parent company of Duquesne Power Light & Co., and so has given a choice to the applicants either to proceed to a hearing on such issues or divest certain generating capacity. (DQE announced in July that it would abandon the merger, but Allegheny has said it will still pursue the deal.) Docket Nos. EC97-46-000, et al., 84 FERC ¶61,223, Sept.16, 1998.
Eastern + Essex Gas. Massachusetts regulators have ok'd the merger between Eastern Enterprises and Essex County Gas Co., estimating the acquisition premium at $47.1 million, to be paid by Eastern shareholders out of merger savings. It defined the premium as the difference in book values between shares of the two companies, rejecting an alternative valuation ($8.2 million) offered by the state attorney general based on the expected reduction in book value per share for Eastern stock. At 2.3 times book value (and 18.6 times current earnings), the purchase