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News Digest

Fortnightly Magazine - December 1999

Association to force use of a single Internet protocol, the Pennsylvania PUC modified its June 11 order on electronic data transfer and exchange standards to clarify that electric distribution companies may choose one of three standards: the "Electronic Delivery Mechanism" set by the Gas Industry Standards Board, or the AS1 or AS2 standards set by the state's Electronic Data Interchange Working Group.

The PUC said that the market will, and should, determine which protocol to use, and that deferring to the market encourages industry convergence of standards, "which would be the ideal resolution of this issue."

The PUC also modified policy on costs incurred by utilities that have implemented a valued-added network (VAN) for data transfers when generation suppliers have failed to adopt a compatible protocol. In its June 11 order it had required utilities to swallow such costs, but on review it accepted a proposal by the state electric association for utilities and suppliers to share costs for using a VAN. Docket No. M-00960890 F0015, Oct. 15, 1999 (Pa.P.U.C.).

Appliance Repair. The Massachusetts DTE rejected a bid by Bay State Gas Co. to conduct its appliance service and repair business as a business integrated within its regulated utility distribution operation, rather than as a separate subsidiary, citing the idea "a serious threat" to competition.

The commission added, "A natural gas LDC is in a position and has an incentive to exert undue preference and favorable treatment when providing services other than gas transportation." Letter order issued Oct. 13, 1999 (Mass.D.T.E.).

Purchased Gas Costs. Wisconsin OK'd a gas cost recovery mechanism for Wisconsin Fuel & Light Co. that will include up to a 2.5 percent producer premium above the gas commodity cost aimed at ensuring availability. The mechanism also would allow recovery of gas commodity costs not on the basis of actual costs paid, but by reference to an incentive benchmark based on market indices or derivatives of indices. No. 6640-GR-107, Oct. 20, 1999 (Wisc.P.S.C.).

Restructuring Plans. A 7,000-page electric restructuring plan filed Oct. 4 at the Ohio PUC by FirstEnergy Corp. claims some $1.1 billion in savings for consumers through 2005.

The plan would entail a 5 percent reduction in the price of generation for residential customers beginning Jan. 1, 2001. FirstEnergy proposed to recover generation-related transition costs, estimated at $3.8 billion after taxes, or an average of 2 cents per kilowatt-hour, over the five-year market development period.

Gas Retail Choice. With the start date for natural gas choice set for Nov. 1, the Pennsylvania PUC granted licenses to 30 natural gas marketers and suppliers, approved an interim settlement to restructure Columbia Gas of Pennsylvania and issued two interim orders, concerning operational and capacity issues plus disclosure of customer information.

* Columbia Gas. PUC Chairman John M. Quain called Columbia's customer choice pilot program, which pre-dated the state's natural gas retail choice law, "a model both for Pennsylvania and the nation." Docket No. R-00994781, Oct. 15, 1999 (Pa.P.U.C.).

* LDC Operations. Guidelines call for each natural gas local distribution company to create an "Operational and Capacity Council" to resolve operational and