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News Digest

Fortnightly Magazine - April 1 2000

acknowledged, "it is not [our] intention to promote unnecessary outsourcing of services... or to promote shoddy analyses." .

Electric Default Service. GPU Inc. announced Feb. 3 that it had not received any bids to furnish state-mandated default energy supply services in 2000 for as much as 20 percent of its customer base. Seven companies had begun the pre-qualification process, but none submitted bids by the Jan. 31 deadline.

QF Cost Recovery. State regulators allowed Montana Power Co. to continue to defer unrecovered out-of-market costs associated with power from qualifying cogeneration facilities (QFs) and to recover such costs eventually from customers that choose an alternative energy supplier.

It OK'd a $16.7 million interim rate reduction in the same case, reflecting a retirement of regulatory assets after a sale of certain of the company's generating assets had produced above-book proceeds sufficient to amortize the amounts. .

Electric Universal Service. In preparation for a July 1 startup date for electric retail choice, Maryland regulators imposed a 23-tiered fee structure to govern how to raise $24.4 million during the next three years from the state's commercial and industrial (C&I) electric customers (and $9.6 million from residential customers) to support a state-mandated universal service program.

C&I customers will pay from $3 to $3,500 per month, according to the size of the customer's utility bill, while residential users will pay a uniform statewide fee, running about $5 per customer per year. .

Utility-Affiliate Transactions. In a rehearing order the Ohio PUC reiterated that utilities may share information and employees with affiliates for reasons of safety, economic efficiency, and operational stability, but only if such sharing does not impede competition. .

Electric Stranded Costs. The West Virginia PSC issued a revised plan to meet the Jan. 1 startup date for electric utility competition that will not require calculation of stranded costs, but instead will impose a cap on default service rates to balance risks between ratepayers and utility stockholders.

Because the plan would not force electric utilities to divest their generation assets, nor require them to provide below-cost power, the PSC concluded that "the utilities are not forced to sustain stranded costs." .

Electric Restructuring. In a 240-page report, the Texas PUC concluded that it did not have enough information to rule on whether to require electric utilities to create separate corporations for regulated and deregulated functions to implement Senate Bill 7, the state's electric restructuring law enacted last year. The commission will revisit that issue in another docket, along with rate design of nonbypassable competition transition charges. .

Natural Gas Rates. Connecticut regulators rejected a performance-based rate plan proposed by Southern Connecticut Gas Co., explaining that the PBR plan failed to quantify savings anticipated from the company's merger with Energy East.

At the same time, the commission refused to eliminate SCG's purchased gas adjustment clause, noting that state law barred such a move absent proof that gas supply costs are stable.

It denied SCG's request for a 10.56 percent rate increase ($24 million) and instead granted a 0.2 percent hike ($500,000). .

Employee Bonuses. On Jan. 31 the