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News Digest

Fortnightly Magazine - October 1 1999

that any adverse testimony "could scuttle the deal" before PUC review. DR 96-50 et al., Aug. 6, 1999 (N.H.P.U.C.).

Stranded Costs. Using a production cost simulation model, predicting market prices for electricity (energy and capacity) ranging from $32.09 per megawatt-hour in year 2000 to $64.61 per megawatt-hour by 2030, Connecticut regulators allowed United Illuminating Co. to recover some $800 million in stranded costs, with $487 million attributable to nuclear assets, $153 million for generation-related regulatory assets, and $160 million for above-market purchased power contracts, after a $16.5 million offset for proceeds from sale of the New Haven Harbor and Bridgeport Harbor fossil plants. Docket No. 99-03-04, Aug. 4, 1999 (Conn.D.P.U.C.).

Natural Gas Slamming. The Georgia PSC on Aug. 3 voted to investigate allegations that a natural gas marketer, United Gas Management, had engaged in "slamming" - the unauthorized switching of customers, and set a hearing for October. Since deregulation began in November 1998, the PSC had received 200 complaints about United. If found guilty, the company could be fined up to $15,000 per violation and have its authority to conduct business in the state revoked.

Y2K Cost Recovery. Alliant Energy management expressed dismay with an Aug. 3 Wisconsin PSC order disallowing rate recovery for year 2000 compliance expenses for Alliant subsidiary Wisconsin Power & Light, an order that makes the utility the only major company in Wisconsin denied Y2K rate recovery.

"Frankly, we are shocked by this decision," said Bill Harvey, president of Alliant Energy-Wisconsin Power & Light. "We have been prudent in our preparedness efforts and believed we would have received at least partial recovery."

The utility's rates are frozen until April 2002, as a condition of the merger that formed the company in 1998. But the merger order allows rate recovery for "one-time extraordinary events" with a cost greater than $4.5 million. The company, which won PSC approval in May 1998 to defer Y2K expenses, had requested $12.2 million in rate relief. Management said it would pursue every means to reverse the decision.

Retail Gas Restructuring. Columbia Gas of Pennsylvania on Aug. 2 became the first utility company to file its restructuring proposal with the Pennsylvania PUC under the state's new gas restructuring law, which requires each natural gas utility to submit a restructuring plan to the PUC by Nov. 1 and opens the entire gas market to choice by July 1, 2000.

The CG plan would allow Internet enrollment and let marketers contract for their own pipeline capacity, rather than assign capacity contracts directly to suppliers.

Consumer Education. The Maine PUC boosted the budget from $1.22 million to $1.49 million for a state-sponsored consumer education program for retail electric choice, setting high goals for customer awareness (as high as 90 percent). The PUC, however, acknowledged that the state will spend only one-half as much per capita as California, the only other state known to have set consumer education performance targets, which sought only to achieve a 60 percent awareness factor. Docket No. 98- 565, July 30, 1999 (Me.P.U.C.).

Retail Shopping Credits. New Jersey regulators set a retail shopping credit