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News Digest

Fortnightly Magazine - January 15 2000

costs to consumers is through closer coordination among economic and environmental regulators," the department said. D.T.E. 98-100, Nov. 19, 1999 (Mass.D.T.E.).

DSM Cost Recovery. Massachusetts OK'd a "rolling period method" for natural gas local distribution companies to recover costs from implementing demand-side management programs, allowing LDCs to recover a specific year's costs over a period equal to the average time between each of the company's last four rate cases.

The method mirrors the rule approved earlier for electric utilities. Colonial Gas Co. had argued that gas conservation programs were longer lived than those of electric companies and therefore should qualify for a longer recovery period. D.T.E. 97-112, Nov. 17, 1999 (Mass.D.T.E.).

Standard Offer Service. Satisfied that the market adequately determined prices for standard offer service, the Maine commission designated WPS Energy Services Inc. and Energy Atlantic standard offer providers for the Maine Public Service Co. territory, with prices as follows:

Residential/small non-residential $0.042906 per kilowatt-hour

Medium non-residential $0.042549 per kilowatt-hour

Large non-residential $0.040038 per kilowatt-hour

Docket No. 99-111, Nov. 18, 1999 (Me.P.U.C.).

Utility Marketing Affiliates. Pennsylvania's interim standards of conduct governing the relationship between gas distribution companies and their marketing affiliates address the state's natural gas competition law, which specifically allows an affiliate to use distribution company logos, by requiring the affiliate to include a "legible disclaimer" saying it is not the same company as the distribution company.

The disclaimer also must state that the prices of the affiliated supplier are not regulated, and that a customer does not have to buy gas from the affiliate in order to receive quality service from the distribution company. The standards remain in effect until the commission sets permanent standards. Docket No. M-00991249, Nov. 18, 1999 (Pa.P.U.C.).

Deferred Taxes. The Connecticut department approved a settlement between the state's consumer counsel and Southern Connecticut Gas Co., allaying concerns that the utility earnings would exceed its authorized return after the company reduced its reserves for deferred federal and state income taxes by almost $1.7 million, for the 12 months ended June 30, 1999.

The agreement calls for the company to credit ratepayers a total of $1 million between November 1999 and February 2000, creating a credit of approximately $0.0112 per thousand cubic feet, based on expected firm sales. Docket No. 99-08-30, Nov. 17, 1999 (Conn.D.P.U.C.).

Affiliate Transactions. Calling the facilities "worth more than their appraised value," the Michigan PSC ruled that a natural gas local distribution company, Consumers Energy Co., must refund its ratepayers all of the $11.7 million gained on a sale of a mothballed synthetic natural gas production facility to an affiliate.

But the PSC said that if the utility instead sells the properties to a highest bidder, the PSC may allow it to retain 25 percent of any gain for the benefit of its shareholders.

Consumers had operated the Marysville Gas Reforming Plant to alleviate gas supply shortages in the 1970s, but closed the plant in 1979 when it was no longer cost-effective, converting the plant for gas storage and other activities. Case No. U-11636, Nov. 16, 1999 (Mich.P.S.C.).

Studies & Reports

Generation Adequacy.