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News Digest

Fortnightly Magazine - September 15 1999

boiler at its Weatherspoon Plant near Lumberton, NC, CP&L is witnessing 35 percent reductions of nitrogen oxides using a technology developed at the St. Petersburg Polytechnic Institute in Russia and brought to the United States by the Research Triangle Institute in North Carolina.

FERC

Transmission Profits. Chief executive officers from 35 electric utilities on July 16 sent a letter to FERC commissioners urging them to set aside a March 31 initial decision (Docket No. ER97-2355- 000, 86 FERC ¶63,014) issued by administrative law judge Michael Levant. That order had set a return on equity for electric transmission assets for Southern California Edison Co. at 9.68 percent - about 2 percent below what SoCalEd earned under PUC regulation.

The CEOs wrote: "Because this is a case of first impression involving transmission assets that became FERC-jurisdictional through a state restructuring, we are concerned about its industry-wide implications and the message it conveys to the industry."

Also writing the FERC was U.S. Rep. Chip Pickering (R-Miss.): "As we actively consider transmission policy options, it would be most helpful to have a timely decision which explains the Commission's current view of appropriate risks and rewards for owners of transmission dedicated to an ISO or other RTO."

Michigan's Muddle: Choice Left Stranded, But What About Costs?

By Carl J. Levesque

"The Legislature, not this court, is the body that must weigh the economic and social costs and benefits of restructuring."

So said the Michigan Supreme Court in late June when, in granting an appeal filed by the state's major investor-owned electric utilities, it overturned an attempt by state regulators to mandate retail choice in electricity without authorization from the state legislature.(fn1)

So what comes next? The Public Service Commission responded by asking interested parties for answers to that very question when it requested legal briefs addressing the impact of the court order.(fn2)

Then, on Aug. 17, the PSC determined that it has the authority to implement its electric restructuring orders issued in 1998 on a voluntary basis with participating utilities. Once customers have begun taking open access service, the commission ruled, that service is no longer a new service under the Supreme Court decision and the commission therefore can regulate the service.

UTILITIES CAN PROCEED VOLUNTARILY. The court had struck down the PSC wheeling plan because it was mandatory. That left open the question of whether utilities could proceed voluntarily to offer choice to customers.

Among the briefs filed, the utilities appeared to say "yes," while the state attorney general gave an unequivocal "no." Meanwhile, other key players echoed the sentiments of the court: Take the matter to the legislature to get competition rolling again, they urged.

Detroit Edison claimed the right to implement voluntary retail access. So did Consumers Energy. In its noticeably short four-page brief, Consumers asked that the commission "not take any action which would interrupt the substantial progress already made in making retail open access available to customers." The Supreme Court decision may have nullified a comprehensive deregulation initiative, but according to the company, the opinion contained nothing "which prevents a voluntary retail