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News Digest

Fortnightly Magazine - November 1 1998

the test year without submitting a cost-benefit analysis, as had been required under a stipulation in a 1995 approving company's integrated resource plan. The stipulation had said that a failure to achieve projected benefits should not require disallowance for costs for any one specific DSM program, but the court ruled that the cost-benefit analysis was a threshold requirement for any cost recovery. Porter v. S.C.P.S.C., No. 24833, 1998 WL 567831, Aug. 31, 1998 (S.C.).

State PUCs

GAS TRANSPORTATION TARIFFS. The New York Public Service Commission has asked for comments on a staff proposal to impose a new basic tariff structure for the transportation of natural gas used for electric generation to reduce the inherent disadvantage of competitive power producers against combined electric and gas utilities, which may transfer some of their gas transportation earnings to their generating operations under share-the-savings programs. The tariff would include three components: (1) a uniform statewide fixed-cost charge of 10 cents per dekatherm; (2) a utility-specific marginal cost charge of between 7-15 cents per Dth; and (3) a value-based adder, initially set at zero, designed to measure real-time changes in spark spreads, or the relationship between the market price of electricity and the cost of gas for generation. Case 98-G-0122, Sept. 24, 1998 (N.Y.P.S.C.).

GAS CAPACITY RELEASE. In a combined electric and natural gas rate case, the Wisconsin Public Service Commission has decided when Northern States Power Co. of Wisconsin can use a gas cost recovery mechanism to keep for its stockholders a 25-percent share of revenues earned above target levels for seven different types of transactions that release excess gas system capacity. The PSC refused to distinguish between swaps, loans, or buy-sell agreements. Instead, it said it would extend GCRM sharing only to "opportunity sales," defined as the sale or release of the utility's unused or underutilized capacity entitlements that become available periodically because of variable daily and seasonal needs.

It also told NSP-W to remove certain gas supply costs from distribution rates, including personnel costs, carrying costs for storage, and the portion of gross receipts taxes based on gas sales revenues. No. 4220-UR-110, Sept. 16, 1998 (Wisc.P.S.C.).

ILLINOIS ELECTRIC RESTRUCTURING. The Illinois Commerce Commission has submitted final proposed rules to the state legislature on electric utility reliability and marketing affiliates, while the commission staff has also issued draft rules for comment on certification of ARES (alternative retail electric suppliers) and functional separation of delivery services from generation:

• Reliability. Utilities must file annual reliability reports comparing frequency and duration of service interruptions for their own customers versus those of other utilities or ARES. Also must design administrative procedure to resolve and pay claims for actual damages or economic replacement value in case of interruptions. Nos. 98-0013, 98-0035, Sept. 10, 1998 (Ill.C.C.).

• Utility Affiliates. Strict, broad-reaching rules cover utility affiliates that compete against ARES, as well as utility affiliates operating within the utility's service territory engaged in brokering, wholesale marketing, or offering consulting services (as an energy service company). Rules bar joint marketing, but utility affiliates can use parent's corporate name or logo in competing against an