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News Digest

Fortnightly Magazine - September 15 1999

Blue Ridge Power Agency, Wisconsin Public Service Corp., Consumers Energy, an ad hoc group of state consumer advocates led by Denise Goulet of Pennsylvania, and MISO participants themselves (at least 16 operating electric utilities), represented by attorneys Michael Small and Paul Flynn of Write & Talisman.

The MISO participants urged an ROE of at least 11.5 percent, adding that such a figure was conservative when compared to returns received by the MISO transmission owners for retail transmission assets under state regulation, which it said averaged 12.7 percent, according to statistics gathered by expert witness Jose Delgado, vice president for electric system operations at Wisconsin Electric Power Co.

The consumer advocates argued that MISO already had signed a stipulation accepting an ROE floor of 10.5 percent, adding that any additional upward adjustment would violate ratemaking precedent set by the Supreme Court's notorious 1944 ruling in FPC v. Hope Natural Gas Co. "'Incentive' or 'reward' in this context can only mean a ¼ return higher than necessary to enable the Midwest ISO to attract capital." FERC Docket No. ER98-1438, briefs filed Aug. 2, 1999.

Capacity Benefit Margin. The FERC clarified its method for computing available electric transmission capacity, and directed transmission providers to take short-term measures to make their capacity benefit margin calculations more accurate and more widely available.

It gave the utilities 30 days to (1) post CBM for all transmission paths on OASIS; (2) explain methods for calculating CBM; (3) set procedures to periodically review and update CBM figures; (4) post on OASIS emergency CBM procedures; and (5) allow CBM to be used on a nonfirm, interruptible basis.

The FERC also directed the North American Electric Reliability Council to work with transmission providers to develop a standard method for calculating CBM by the end of the year. Docket No. EL99-46-000, July 28, 1999, 88 FERC ¶61,099.

U.S./Mexico Link. Central & South West Corp. and Mexico's government-run Comision Federal de Electricidad on July 21 announced plans to install an asynchronous electric tie using a new high-voltage direct current (HVDC) technology. The electric tie will link the transmission system of CSW's subsidiary, Central Power & Light Co., with the Mexican transmission system.

CSW is working with EPRI to develop, install and test the tie, which is expected to become operational by June 2000. The new line will provide strong voltage support to Piedras Negras, Mexico, and Eagle Pass, Texas, while significantly improving reliability between the two electric grids.

The new line will give CPL and CFE the ability to provide emergency service to each other without first having to disrupt power. CPL will operate the tie at Eagle Pass and the tie will be available for use by the other utilities through the Electric Reliability Council of Texas ISO.

State PUCs

Transition Plans. Proposals were due Aug. 20 from consultants seeking to assist the Ohio PUC staff in analyzing the transition costs of eight Ohio electric utilities - Cleveland Electric Illuminating Co., Ohio Edison Co., Toledo Edison Co., Columbus Southern Power Co., Ohio Power Co., Dayton Power & Light Co., Cincinnati Gas & Electric