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News Digest

Fortnightly Magazine - November 1 1999

no impact on its ability to protect the interests of Ohio ratepayers. Case No. PUA990020, Sept. 17, 1999 (Va.S.C.C.).

Southern Union + Penn Enterprises. The Pennsylvania PUC unanimously approved the $500 million merger of Southern Union Co. and Pennsylvania Enterprises Inc., saying it would likely offer greater choice to consumers. The merger required approvals from the Missouri and Florida commissions, as well as the Federal Energy Regulatory Commission, all of which were expected by Nov. 1. Docket No. A120011 et al., Sept. 15, 1999 (Penn.P.U.C.).

UtiliCorp + Empire. Shareholders of Empire District Electric Co., which serves customers in Missouri, Kansas, Oklahoma and Arkansas, voted to merge with UtiliCorp United Inc. in a deal that would pay Empire stockholders either $29.50 in cash or UtiliCorp common shares with an average trading price of $29.50 for each Empire common share at the time of the merger's completion, subject to a collar if UtiliCorp share prices should rise or fall greatly before deal completion.

The merger would require regulatory approval from the FERC, as well as state commissions in Missouri, Kansas, Oklahoma, Arkansas, Colorado, Iowa and Minnesota. West Virginia has approved the merger. "We expect all regulatory approvals to be completed sometime in mid- to late 2000," said Myron McKinney, Empire president and chief executive officer.

Wisconsin Energy + WICOR. Wisconsin Energy Corp. and WICOR Inc. on September 9 entered into a settlement agreement in connection with litigation filed by a shareholder of WICOR challenging the proposed merger.

Transmission & ISOs

Return on Equity. The FERC agreed to consider additional evidence in a highly contentious proceeding on the appropriate rate of return on common equity for Southern California Edison's transmission facilities under the utility's proposed tariffs for transmission and distribution access.

Rather than address the merits of a prior order in the case issued in March by an administrative law judge (86 FERC ¶63,014), which had set a return on common equity at 9.68 percent for transmission facilities to be turned over to the California Independent System Operator, the FERC decided instead to gather more information via a "paper" hearing.

The FERC said that further development of the record was appropriate in light of possible risks on transfer of control to the ISO. Commissioner William Massey said that explanation was reasonable, but said he would issue a concurring opinion because he believed the commission was reopening the record for a different purpose - to set policy in advance of its rulemaking on regional transmission organizations. Commissioner Curt Hébert disagreed: "This order has nothing to do with FERC's RTO NOPR." Docket Nos. ER97-2355-00 et al, Sept. 15, 1999 (F.E.R.C.).

International Arbitration. Opting to go the route of international arbitration, the Vermont Joint Owners, a coalition of 15 electric companies led by Central Vermont Public Service Corp. and Green Mountain Power Corp., are attempting to use a 66-day power interruption that arose from a January 1998 ice storm as reason to scuttle a 30-year, multi-billion-dollar electric distribution agreement entered into with Hydro-Quebec.

The utilities believe the Hydro-Quebec transmission system is unreliable, but Hydro-Quebec management argued that the