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News Digest

Fortnightly Magazine - March 1 2000

Receipts Taxes. New York PSC chair Maureen O. Helmer praised Gov. George Pataki's proposed elimination of the "onerous" gross receipts tax on electric and natural gas utilities, which he championed in his Jan. 4 "state of the state" address.

Helmer said the action would have "an immediate and meaningful impact on everyone's energy bills, and it will provide an economic shot-in-the-arm to the energy-intensive manufacturing businesses that are critical to the continued revitalization of upstate New York."

Gas Transportation. The North Carolina commission opened a docket requesting comments on all aspects of rates, terms and conditions of transportation-only service by natural gas distribution utilities. Docket No. G-100, Sub 80, Jan. 4, 2000 (N.C.U.C.).

Gas Unbundling. Massachusetts regulators opened a docket to set rules for unbundling natural gas services, so that a utility would provide distribution-only service within its existing service territory and offer a default service option to retail customers not served by a competing supplier. D.T.E. 98-32-E, Dec. 17, 1999 (Mass.D.T.E.).

Third-Party Billers. The Pennsylvania PUC ruled that third-party billing companies must pay power suppliers and electric distribution companies for undisputed basic charges, even if the customer doesn't pay.

It rejected arguments - including those by dissenting Commissioner Nora Mead Brownell - that the ruling would place an unreasonable burden on third-party billing companies. The majority pointed out that billers will tend to be large, well-established credit card companies. Docket No. M-00991230, F.0002, Nov. 19, 1999 (Pa.P.U.C.).

Gas Retail Pilots. Out of concerns for reliability, the Virginia commission rejected a request by Washington Gas Light Co. to modify its pilot program for retail gas choice to allow it to withhold upstream pipeline capacity from suppliers at its discretion and adjust the amount of gas delivered by suppliers on exceptionally warm days if usage is low and extra storage is unavailable.

The commission said that taken together, the modifications would relieve WGL from its responsibility to acquire capacity and storage to serve customers who elect to participate in the pilot, allowing WGL to "effectively abdicat[e] its role as the supplier of last resort to these customers." Case No. PUE980895, Nov. 8, 1999 (Va.S.C.C.).


Regulatory Assets. The Connecticut Supreme Court upheld a decision by state regulators to apply $110 million of an electric utility's $141 million projected surplus to allow the utility to accelerate amortization of certain regulatory assets, rather than make refunds. The court called the accelerated amortization "directly beneficial to ratepayers." Office of Consumer Counsel v. DPUC, No. 16106, 2000 WL 29564, Jan. 25, 2000 (Conn.).

Rolled-in Pricing. A U.S. appeals court upheld orders by the Federal Energy Regulatory Commission that allowed Southern Natural Gas Co. to employ "rolled-in" rates to recover costs to build a new pipeline to bypass the existing pipeline of a smaller competitor, despite claims that the FERC's 5 percent test for qualifying for rolled-in rates worked as a subsidy for larger pipelines.

Midcoast Interstate Transmission Inc., the smaller competitor, had argued that larger systems such as Southern's could readily absorb the cost of new projects without a noticeable rise in systemwide rates. Midcoast Interstate Trans.