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price for Essex stock was seen to fall squarely within the range of 1.9 to 2.8 times book value for recent mergers for gas distribution utilities. D.T.E. 98-27, Sept. 17, 1998 (Mass.D.T.E.).
AEP + C&SW. Arkansas regulators approved the merger of American Electric Power Co. and Central & South West Corp. on condition that in future cases before the FERC, the post-merger company will waive any rights it might have under the 1992 Ohio Power case (954 F.2d 779), which limits state authority to review transactions with affiliates, to ensure that Arkansas ratepayers enjoy benefits available to those in other states. Docket No. 98-172-U, Order No. 5, Aug. 13, 1998 (Ark.P.S.C.).
Purchased Power Contracts. The Norwood (Mass.) municipal utility has lost antitrust and breach-of-contract claims filed after New England Electric Service sold all its nonnuclear generation to USGen, and after the FERC then had approved tariffs that allowed New England Power Co. (a NEES subsidiary) to reconfigure its bulk power sales by granting discounts to its power-buying affiliates (Mass. Elec. Co. and Narragansett Elec.), but freezing prices charged to Norwood at levels 20-percent higher. Norwood had enjoyed a right to buy all-requirements power from NEPCO until 2008 under a 1983 antitrust settlement.
The federal district court ruled that the 1983 decree granted rights to Norwood only to buy power at FERC-approved tariffs, whatever they might be, and that the rates were immune from collateral attack under the filed-rate doctrine. It added that the FERC had allowed Norwood to terminate its NEPCO contract, but only after paying a stranded- cost charge. Town of Norwood v. New Eng. Pwr. Co., No. CIV. a. 97-10818-PBS, 1998 WL 685158, Sept. 28, 1998 (D.Mass.).
Retroactive Ratemaking. The Maine Supreme Court says that the rule against retroactive ratemaking does not bar ex post facto recovery of costs deferred by the PUC since such recovery does not express any opinion on whether prior rates were adequate. The case involved costs incurred by New England Tel. & Tel. Co. to expand local calling areas. Public Advocate v. Maine PUC, No. PUC-97-455, 1998 WL 664075, Sept. 28, 1998 (Me.).
Return on Equity. In two recent cases, state courts have upheld PUC rulings granting returns on common equity to reflect higher risk and general but unspecified "threats to the industry" perceived by investors because of utility restructuring and deregulation.
• South Carolina. Court affirms PSC order setting 12 percent ROE for South Carolina Electric & Gas Co. S.C. Energy Users Comm. v. S.C.P.S.C., No. 24839, 1998 WL 641916, Sept. 14, 1998 (S.C.).
• North Carolina. Ok's order that denied petition by group of industrial customers to bring in Carolina Power & Light Co. for first rate review since company's last rate case in 1988, when a 12.75-percent ROE was granted. Says commission could take judicial notice of trends when accuracy "cannot reasonably be questioned." State ex rel. Utils. Comm'n v. Carolina Indus. Group for Fair Utility Rates, 503 S.E.2d 697, Sept. 1, 1998. (N.C.).
Municipal Annexations. The Tennessee Supreme Court ruled that state law permits a city to condemn assets of an electric