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News Digest

Fortnightly Magazine - November 15 1998

cooperative within city limits even if it then grants a franchise to a third party to operate the facilities, as long it serves consumers interests. City of South Fulton v. Hickman-Fulton Counties Rural Elec. Co-op. Corp., 1998 WL 546504, Aug. 31, 1998 (Tenn.).

State Legislators

Electric Retail Choice. The Colorado Electricity Advisory Panel, created by Colorado Senate Bill 98-152 (signed into law in May) to study the merits of retail electric competition, was to select winning bids on Nov. 16 under two requests for proposals issued on Sept. 25 to study some 16 issues identified in the law, related to costs, rates, impacts of retail choice:

• RFP on Legal Issues. Solicits analysis of socio-economic and legal issues, such as universal service, affordability of distribution service, and reliability of generation and transmission.

• RFP on Economic Issues. Asks for modeling on energy and economic issues to quantify price impacts of market power, stranded costs, and reliability, as well as impacts on rural areas, local tax revenues, employment, and income.

Gas Retail Choice. Signed by the Governor on August 25, California Senate Bill 1602 has effectively tabled the state PUC's "Green Book" initiative and rulemaking (R. 98-01-011, filed Jan. 21, 1998) on natural gas market reform. The law permits the PUC to investigate the issue but prohibits the commission from enacting any gas industry restructuring decision, or enforcing any such decision that could affect core customers, prior to year 2000.

Speaking on Oct. 6, at the DOE/NARUC Natural Gas Forum in Pittsburgh, Elena Schmid, director of the PUC's Office of Ratepayer Advocates, echoed a certain reluctance to act: "Having looked at our electric experience, we feel that we should go slow [in gas] and should not ask regulators to force distributors out of the merchant function. Instead, we should wait for merchants to do the forcing."

Transmission and ISOs

Regional Coordination. On September 29, the U.S. Department of Energy assigned authority to the Federal Energy Regulatory Commission under Sec. 202(a) of the Federal Power Act to divide the nation into regional districts to promote interconnection and coordination of electric transmission, and formation of independent system operators. The DOE had never before exercised such authority.

Electric Capacity Prices. On hearing complaints on prices and availability for electric capacity (firm energy) in the PJM Interconnection and ECAR (East Central Area Reliability Coordination Agreement), the Pennsylvania Public Utility Commission on September 21 issued an interim order directing PJM capacity holders to release or offer installed capacity at $19.72 per kilowatt-year. The PUC acted only when PJM failed to address the issue to the PUC's satisfaction at a meeting held on September 10.

According to the PUC, if suppliers in the state's retail market are required to pay capacity charges beyond that contemplated by the PUC's restructuring orders, the generation shopping credits may not be sufficient to develop a competitive market (em a result the PUC called "unacceptable." Pennsylvania Power & Light Co. claimed the PUC overstepped its retail jurisdiction and said it would challenge the order in the courts. Docket No. R-00974009, Sept. 21, 1998 (Pa.P.U.C.).

New York