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News Digest

Fortnightly Magazine - December 1999

Gas Pipelines

Oil Pipeline Conversions. Despite opposition from the California PUC, the FERC issued an optional certificate to Questar Southern Trails Pipeline Co. allowing it to acquire an oil pipeline from its affiliate, Questar Line 90 Co., and convert the line to natural gas service, while constructing new facilities to provide open access natural gas service from the Four Corners area of New Mexico, Arizona, Utah and Colorado to Southern California.

The California PUC had said the project would lead to unsubscribed capacity on the SoCalGas system and had questioned the lack of any comparative cost analysis between new construction, current transportation service and incremental capacity of existing systems.

But the FERC noted that optional certificate rules do not require it to examine market need for a project. Docket Nos. CP99-163-000 et.al, Oct. 13, 1999 (F.E.R.C.).

Transmission & ISOs

The New York PSC OK'd a Nov. 18 start date for the New York Independent System Operator and issued orders on asset transfers and financing.

* It gave the ISO authorization to enter into a $12 million revolving credit facility to provide working capital during the ISO's initial years of operation, and to enter into a $54 million term loan, to be used to reimburse electric utilities for their start-up cost contributions. Case No. 99-E-1176, Sept. 21, 1999 (N.Y.P.S.C.).

* It approved asset transfers (such as the New York Power Pool Energy Control Center Buildings and equipment) and transfer of operational control of designated transmission facilities from the investor-owned utility member systems of the NYPP to the ISO. Case No. 99-E-0745, Sept. 21, 1999 (N.Y.P.S.C.).

Congress

Electric Restructuring. Senate Energy and Natural Resources Committee Chairman Frank H. Murkowski (R-Alaska) on Oct. 7 unveiled his proposed electric restructuring bill, H.R. 2944. The bill prospectively would repeal the Public Utility Holding Company Act and the Public Utility Regulatory Policies Act. The bill encourages the creation of regional transmission organizations, giving standards for the FERC to follow, along with including an eminent domain provision to help address market power issues and facilitate building of new facilities.

The bill includes no renewable energy mandate. It also doesn't address the role of the Tennessee Valley Authority or Bonneville Power Administration, nor atld between municipal and investor-owned utilities.

Nuclear Power

Waste Storage. Fearing that on-site storage facilities "could become de facto permanent disposal sites," the New England Governors' Conference on Oct. 5 urged the U.S. Dept. of Energy to retract its proposed plan to take title and assume responsibility for the spent nuclear fuel on-site. Instead, the governors favored a central interim storage site.

The governors said DOE's plan would abridge states' rights by diverting funds already earmarked for a permanent repository. They noted that New England consumers had already contributed $1.3 billion. See www.tiac.net/users/negc/nuclear%20waste%20storage.html.

News Digest was compiled by Carl J. Levesque, associate editor, Lori A. Burkhart and Phillip Cross, contributing legal editors, and Bruce W. Radford, editor-in-chief. For continual news updates, see www.pur.com.

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