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News Digest

Fortnightly Magazine - October 1 1999

100,338 gigawatt-hours in 1998 to 110,643 GWh in 2003, an increase of 10,305 GWh. It said the average 1998 electric price was 7.1 cents per kilowatt-hour, representing about $7 billion, or 2.8 percent of the state's total personal income.

Consumers Energy and Detroit Edison, the two major electric public utilities in the state, and the commission staff project increasing industrial production, but slow growth in the auto industry. See http://ermisweb.cis.state.mi.us/mpsc/.

Natural Gas Demand. The growth in residential gas demand that began in the mid- 1980s - making natural gas the dominant fuel in all U.S. regions except the South - will continue as consumption increases about 1 percent per year through 2015. 's according to the "1999 Residential Sector Summary," the Gas Research Institute's annual look at key market and regulatory factors expected to shape future residential gas demand. Most of the projected growth in residential gas consumption will come from gas water heating, clothes drying and hearth products. The report (GRI-99/0006) may be ordered by fax at 630-406-5995, or contact Kelly Murray at 703-526-7832.

Transmission & ISOs

FERC Regulatory Fees. The FERC granted a temporary waiver of annual regulatory charges for all power exchanges and independent system operators, in response to a request by the PJM Interconnection, which claimed that it makes no sales for its own account, nor receives any wholesale or transmission revenues, nor determines prices. Docket No. EL98-71-000, July 28, 1999, 88 FERC ¶61,109.

Nevertheless, the Automated Power Exchange said it would move forward with a related appeal in a federal court as long as the waiver is only temporary. APX is challenging a March 1998 FERC ruling that ordered it to pay an annual regulatory charge of $0.03 per megawatt-hour of electricity traded. Oral arguments are scheduled for Dec. 3 in the D.C. Circuit.

Meanwhile, APX on July 1 opened the first privately operated power exchange in the Midwest. Based in the service area of FirstEnergy Corp., the APX-Ohio Hub allows buyers and sellers in that region to track by computer forward prices for wholesale electricity. Previously, price tracking and trading could be done only over the telephone or on electronic bulletin boards.

Courts

Bankruptcy Jurisdiction. A federal appeals court said a bankruptcy judge abused his discretion by trying to block a state PUC rate order, but said the case hinged on the facts and was not the last word on whether bankruptcy judges can enjoin state ratemaking actions.

The judge had accused the Louisiana PSC of invading his exclusive authority over interest charges accruing after a bankruptcy petition is filed when the PSC had restructured rates for the bankrupt Cajun Electric Power Co-op to reflect a suspension of the co-op's duty to pay interest on debt obligations.

The court disagreed, saying an escrow account set up by the PSC would preserve the issue for later disposition. Cajun Elec. Pwr. Co-op Inc. v. Maybey, No. 98-31258, 1999 WL 624018, Aug. 16, 1999 (5th Cir.).

Hydro Relicensing. Siding with the government on most issues, a federal appeals court said the FERC need not consider the decommissioning of