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News Digest

Fortnightly Magazine - November 1 1999

restructuring-related tasks performed by existing employees.

The commission refuted BHE's contention of a 100 percent correlation between an employee's time and the benefits provided to shareholders, but said that at least some portion of staff time devoted to restructuring detracted from shareholder gains, and that the company - along with ratepayers - should share in the savings gained from avoiding the costs of hiring new employees or consultants. The sharing mechanism, the commission said, would give the company proper incentive to minimize restructuring costs. Docket No. 97-596, Sept. 8, 1999 (Me.P.U.C.).

Standard Offer "Gaming." Clarifying its order that attempted to deter the "gaming" of standard offer service by larger customers switching back and forth between competitive and default service, the Maine PUC ruled that its "opt-out charge" provision applies to competitive electricity providers that act to move customers with a combined demand of at least 50 kilowatts onto and off of the standard offer service.

The charge, originally intended for individual customers or aggregated groups with collective demands of greater than 50 kW involved in gaming of standard offer service, came as a result of a requirement that standard offer prices be fixed for a year. However, the original order left in question whether the term "aggregated groups" included competitive electricity providers. Docket No. 99-111, Sept. 9, 1999 (Me.P.U.C.).

Gas Resource Planning. Massachusetts regulators approved a long-range demand forecast and supply plan prepared by Berkshire Gas Co., but questioned the company's reliance on historical averages to construct trend lines to predict future needs, noting that other gas utilities in the state were using econometric modeling instead. D.T.E. 98-99, Aug. 27, 1999 (Mass.D.T.E.).

Competitive Metering. The New York PSC denied a rehearing of its competitive metering order issued early last summer (Case 94-E-0952, June 16, 1999), but clarified that utilities have the opportunity to recover any differences between the embedded costs the commission uses as a proxy of long-run costs and any actual avoided costs. While refuting Consolidated Edison Co.'s and Niagara Mohawk Corp.'s assertions that electronic data interchange must be implemented prior to competitive metering, the commission did extend the tariff filing deadline for utilities from Oct. 1 to Nov. 1, saying that "some additional time may be useful to allow the parties to develop rules and procedures before the utility tariff filings." Case 94-E-0952, Aug. 18, 1999 (N.Y.P.S.C.).

Electric Rate Design. The Arkansas PSC's directive for Oklahoma Electric & Gas Co. to redesign its electric rate structure to equalize service class rates of return will require rate increases for residential users and concurrent decreases for general service class customers, to be phased in over a three-year period. The commission said that the move to competition mandated under the state's Electric Consumer Choice Act of 1999 made the elimination of subsidies necessary so that consumers have the accurate price signals necessary for an efficiently functioning marketplace. Docket No. 98-036-U, Order No. 7, Aug. 6, 1999 (Ark.P.S.C.).

Merchant Plant Jurisdiction. While authorizing an Enron Corp. subsidiary to construct a 500-MW gas-fired peaking plant in Knox County, the Indiana commission ruled that it would