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News Digest

Fortnightly Magazine - February 15 2000

in early 2000, now requires approval only by the U.S. Securities and Exchange Commission.

SIGCORP + Indiana Energy. The FERC approved the $1.9 billion merger of SIGCORP Inc., the parent company of Indiana Gas and Electric Co., with Indiana Energy Inc. to form Vectren Corp. Docket No. EC99-106-000, Dec. 15, 1999 (F.E.R.C.).

State PUCs

Distributed Generation. Prompted by a request from the state's independent power producers, the New York PSC opened a docket to investigate costs, benefits and rates for distributed generation, and the standby rates charged by utilities to private power producers (IPPs) and self-generators. The state's electric utilities had opposed the study:

* Con Ed. Argued that standby rates were already set in utility-specific restructuring plans and remain viable as part of a bundled transmission and distribution service.

* NYSE&G. Said a PSC study could undermine ongoing contract negotiations with IPPs.

* Niagara Mohawk. Claimed that IPPs in its territory could already shop for standby power on the open market.

* Rochester Gas & Elec. Argued that rate design for standby service is not amenable to generic determination.

The PSC said it would continue to address utility-specific issues in the ongoing restructuring case but the generic case would consider state-wide impacts. Case 00-E-0005, Case 99-E-1740, Jan. 10, 2000 (N.Y.P.S.C.).

Small-Scale Generation. The New York PSC also set standardized protocols for small electric self-generators of up to 300 kilovolt-amperes (kVA) to apply for and gain interconnection with the bulk power systems of the six New York investor-owned local electric utilities.

It set relaxed requirements for smaller generators up to 10 kVA, rejecting proposals by many private power generators to boost the smaller-unit threshold to 50 kVA.

A standard interconnection contract would carry a five-year term, but would not require buy-back of electricity by the utility. Power quality rules require compliance with IEEE standard 519. Case 94-E-0952, Opinion No. 99-13, Dec. 31, 1999 (N.Y.P.S.C.).

Gas Transportation. New York regulators extended the deadline until March 31 for local distribution utilities to file a gas transportation operating procedures manual. Case 97-G-1380, Jan. 11, 2000 (N.Y.P.S.C.).

Arizona Retail Choice. In a possible blow to plans for competition, both Enron Corp. and the Phoenix-based Center for Law in the Public Interest have sued in Arizona courts to block a September settlement between Arizona Public Service Co. and the Arizona Corporation Commission concerning electric restructuring and customer choice.

The Center wants to have the settlement thrown out on grounds that rates were set without a thorough examination of the financial condition of APS. Enron Corp. (certified as a retailer in Arizona) agrees with the allegation that the settlement was approved illegally, but says it merely wants it modified to boost the shopping credit and require greater oversight of generation spun off to an APS affiliate.

The suits were filed in Maricopa County Superior Court and the Arizona Court of Appeals.

Electric Restructuring. The Maryland PSC OK'd a restructuring plan for Potomac Electric Power Co., forcing an auction of power plants and facilities not required for transmission and distribution services, to help set a value on any stranded