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News Digest

Fortnightly Magazine - March 1 1999

and industrial customers to use the exchange to sell electric power back to FirstEnergy during periods of peak demand. The approval of the Ohio PUC is required. (Cal.P.U.C.).

Mergers and Acquisitions

AEP + C&SW. In response to FERC's Nov. 10 order requiring a hearing on their proposed merger, American Electric Power Co. and Central & SouthWest Corp. proposed to divest 550 megawatts of generation capacity: 300 MW at C&SW's Northeastern Power Station Units 3 and 4 in the Southwest Power Pool, and 250 MW at the Frontera power plant, a merchant plant under construction in the Electric Reliability Council of Texas. Docket No. EC98-40, filed Jan. 14, 1999 (F.E.R.C.).

Courts

Transmission Upgrades. A federal appeals court affirmed that when electric utilities upgrade transmission lines to accommodate mandatory energy purchases from a qualifying cogeneration facility, the FERC can force utilities to assign the upgrade costs to all their customers on the grid - not just the QF. West. Mass. Elec. Co. v. FERC, Nos. 92-1665 et al., 1999 WL 12776, Jan. 15, 1999 (D.C.Cir.).

Coal Contract Buyouts. Reversing a lower court ruling, the Illinois Supreme Court agreed with state regulators that Illinois Public Service Co. could use its fuel adjustment clause to recover some $70 million incurred to modify or buy out certain coal purchase contracts. It denied claims that IPS modified contracts not to control costs, but to retire a scrubber at a power plant. Archer-Daniels-Midland Co. v. Ill. Commerce Comm'n, Nos. 84898, 84899, 1998 WL 906706, Dec. 3, 1998 (Ill.).

Co-op Diversification. Overturning a lower court order, the Alabama Supreme Court allowed Coosa Valley Electric Co-op. to acquire a propane distribution business, despite claims by complaining propane dealers that the move went beyond enabling laws and articles of incorporation. DeKalb County LP Gas Co. Inc. v. Suburban Gas Inc., No. 1971443, 1971532, 1998 WL 826600, Nov. 25, 1998 (Ala.).

Business Wire

Duquesne Enterprises, a wholly owned subsidiary of DQE Inc., has announced a partnership with Broadpoint to provide what is believed to be the first free long-distance telephone service offered in the United States. The new service, "FreeWay," would allow subscribers to place free long-distance telephone calls in return for listening to advertisements delivered by phone - about two free minutes for each 10- to 15-second commercial. Callers would subscribe by visiting Broadpoint's website at www.broadpoint.com and completing a questionnaire.

Duke Energy Power Services (DEPS) has completed a 10-year lease with the Port of San Diego to operate and eventually replace its 706-MW South Bay Power Plant. The Port of San Diego purchased the plant from San Diego Gas & Electric Company in 1998 for $110 million. DEPS is expected to close on the lease by mid-1999. Once the lease expires, DEPS will dismantle the plant and build a new power plant.

Framatome Technologies Inc. (FTI) and Public Service Electric & Gas (PSE&G) have entered into a contract for FTI to provide integrated outage services during the 1999 refueling outages at PSE&G's Hope Creek, Salem Unit and Salem Unit 2 nuclear power plants. In addition, FTI will perform steam generator chemical