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News Digest

Fortnightly Magazine - March 1 1999

cleaning during the spring Salem Unit 2 outage.

CMS Energy Corp.'s energy marketing subsidiary, CMS Marketing, Services and Trading, has signed an agreement with Western Michigan University to supply a significant portion of its electricity needs beginning Jan. 4, 1999. The two-year contract calls for CMS-MST to provide up to 15 MW of electricity for the WMU campus in Kalamazoo. Western Michigan expects to save 15 percent to 16 percent on its electric bill, about $15,000 a month, with the new contract.

Altra Energy Technologies Inc., through its operating subsidiary Altra Streamline LLC, has signed a letter of intent to purchase QuickTrade LLC and QuickTrade Canada Limited Partnership from subsidiaries of Dynegy Inc., Sempra Energy and Nicor. The combined companies will facilitate more than 500 billion cubic feet per day in natural gas trades, more than 500,000 barrels per day in liquid fuel transactions and growing volumes in power markets.

State Agencies

Tax Issues. New York State Electric and Gas Corp. on Jan. 8 filed a petition at the New York State Department of Taxation and Finance asking whether customers who shop for electric and natural gas and have the commodity delivered by a utility should be required to pay sales taxes on the delivery charges.

At issue is a controversial law effective at the beginning of the year allowing utility distribution service to be taxed. Meanwhile, the National Energy Marketers Association held an emergency session of its New York Energy Policy Committee in response to the "unexpected" imposition of that tax. It called the new tax a "setback" for New York energy policy that will have a chilling effect on low energy prices and job relocation.

Transmission & ISOs

Independent System Operators. The FERC OK'd a proposed redispatch service for the PJM Interconnection, but required that PJM modify the plan to provide the service both to members and nonmembers.

The plan, which would modify PJM's operating and reliability assurance agreements, would allow market participants to elect to pay congestion charges one day in advance, in lieu of having a specific transmission transaction curtailed the next day under the North American Electric Reliability Council's transmission loading relief (TLR) procedures. The congestion charges would be calculated in accordance with PJM's locational marginal pricing system. Docket No. ER99-647-000PJM, Jan. 13, 1999 (F.E.R.C.).

California Turf Conflicts. The California Public Utilities Commission was to act on Jan. 20 on a draft resolution prepared by its legal division proposing an interagency memorandum of understanding between the PUC and the state's Electricity Oversight Board to resolve conflicts in responsibility in cases before the FERC concerning the state's independent system operator and power exchange.

According to the draft, the EOB would act as lead agency on ISO and PX policy, rules and proceedings governing reliability transmission system reliability, adequacy and planning and markets for bulk energy and generation. The PUC would take the lead on matters relating to retail distribution service and reliability, retailer regulation, utility contracts with qualifying cogeneration facilities and utility mergers.

The EOB and PUC would share power in cases on utility transmission rates and rate