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News Digest

Fortnightly Magazine - February 15 1999

legislation for electric restructuring (with retail choice starting Oct. 1 for some customers), the Illinois Commerce Commission opened a docket to consider whether to unbundle electric delivery services statewide, whether to make exceptions for small utilities and how to apply transition charges to customers taking unbundled delivery services. An expedited hearing schedule will allow for a final decision on or about March 31, less than four weeks after utilities are required to file tariffs for delivery services. No. 99-0013, Jan. 13, 1999 (Ill.C.C.).

Retail Choice Lottery. A hearing examiner at the Illinois commission approved a phased implementation plan for retail choice for electric service developed jointly by the state's major electric utilities. The plan includes guidelines for a lottery to select which nonresidential customers within four specific groups will be the first to participate, despite objections that a lottery process will select some eligible customers who are uninterested in or unsuited for competitive services, or perhaps exclude others who are inclined and best prepared to exercise retail choice. No. 98-0650, Jan. 12, 1999 (Ill.C.C.).

Software Development Costs. At a meeting held Dec. 3, Wisconsin regulators reviewed and approved a state position paper that accepts the recommendations issued in March 1998 by the American Institute of Certified Public Accounts in the AICPA's "Statement of Position 98-1: Accounting for the Costs of Computer Software Developed or Obtained for Internal Use."

The policy covers software developed internally, where no substantive plan exists or is being developed to market the software externally.

As noted by the PSC staff, SOP 98-1 does not change the conclusions of the Emerging Issues Task Force in its Issue Paper No. 96-14, which requires current expense treatment for external and internal costs incurred to modify internal-use software to correct the Y2K bug.

Nuclear Depreciation. North Carolina regulators authorized Carolina Power & Light Co. to accelerate cost recovery of its nuclear generating assets through depreciation over a five-year period starting Jan. 1, 2000, extending prior authorization granted in December 1996. The accelerated cost recovery must be accomplished through existing rates, and allocated among customer classes using the same factor used to allocate nuclear production plant costs. Docket No. E-2, SUB 737, Dec. 22, 1998 (N.C.U.C.).

Purchased Gas Adjustments. The Oregon PUC OK'd stipulated changes to its policy on purchased gas costs. The new policy provides for a general earnings review each spring, but allows utilities to avoid a fall earnings review if they accept a risk-reward sharing mechanism that allocates responsibility to stockholders for at least 33 percent of commodity cost discrepancies under the PGA cost-tracking procedure. UM 903, Order No. 98-543, Dec. 23, 1998 (Ore.P.U.C.).

Plant Divestitures. Oregon also denied a request by Portland General Electric Co., supported in principle by PacifiCorp and a coalition of industrial customers, to open a generic proceeding to design an auction process that utilities might use to sell all or a substantial portion of their generating assets and energy purchase and sales contracts. The PUC questioned whether broad guidelines would be useful for utilities with different resource mixes and different jurisdictional issues. UE 102, Dec.