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News Digest

State PUCs
Fortnightly Magazine - April 15 2000

and all appreciation in plant values "to compensate them for risks they have borne while the facilities were in rate base."

Auction Participants . The New York PSC OK'd Central Hudson Gas & Electric Corp.'s auction plan for the sale of its Danskammer fossil generation facility and its 35 percent interest in the Roseton fossil generation facilities, after accepting the utility's offer to exclude its unregulated affiliate from the auction.

The PSC directed Central Hudson to use the Federal Energy Regulatory Commission's market power guidelines "for selecting bidders that can survive market power scrutiny," and required the company to be able to certify to the commission that the winning bidder meets the horizontal market power guidelines set out in previous auctions.

The PSC noted that the auction plan largely resembles "the process that has been successfully deployed in other auctions," citing the Niagara Mohawk auction order Case 96-E-0-891, April 24, 1998 (N.Y.P.S.C.).

Hydro Relicensing . Hydroelectric project sponsors won one and lost one in a pair of orders issued by the FERC.

  • Collaborative Process. The FERC relicensed two hydroelectric projects owned by Avista Corp. on the Clark Fork River, marking the first successful use of an alternative licensing process that shaved two years off the normally three-year process. Over 40 organizations agreed to the granting of the 45-year licenses.
  • Fish Ladders . On the same day, the FERC rescinded a license granted to Public Utility District No. 1 of Okanogan County, Wash. for the proposed 4.1-MW Enloe Dam, saying that fish ladders required by the National Marine Fisheries Service (NMFS) of the U.S. Department of Commerce would greatly increase costs when the project already appeared to be uneconomical. The Canadian government also opposed the fish ladder, saying it would introduce nonindigenous fish, creating disease risk.

Studies & Reports

Changes to billing systems represent the largest back-office expense for utilities and suppliers preparing for competitive energy markets, according to a study from Xenergy Inc., which notes that billing problems in some cases have led to lawsuits or bankruptcies.

The study says utilities report spending anywhere from $1.22 to $22 per customer, with one utility reportedly spending up to $82 million to make billing system changes needed to accommodate retail access.

"Having the right systems in place is critical to the success or failure of competition," said Jill Feblowitz, XENERGY senior consultant and project manager for the study.

Transmission & ISOs

RTO Workshops . Philip J. Pellegrino, CEO of ISO New England, Inc., caused a stir on the first day of the FERC's two-day workshop on regional transmission organizations (RTOs) held March 15-16 in Philadelphia, when he acknowledged that in the "mid-term," or between three and five years out, it was likely that the independent system operators (ISOs) for New York, New England, and PJM would combine to form a single RTO in the Northeastern United States. Pellegrino's acknowledgment drew no protest from William Museler (CEO of the New York ISO) or Richard Wodyka (COO for PJM) when they took the podium later in the day.

Pellegrino added that a binary form of RTO