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News Digest

Electric Reliability
Fortnightly Magazine - June 15 2000

project capacity.

Murkowski, while pleased with the FERC's project approval, was still unhappy about the evidentiary requirement, and made his feelings known on April 27, two days after the FERC decision was issued, at the hearing where he had invited all four FERC commissioners to comment on pending federal legislation on electricity restructuring.

"I will want an explanation from each of you as to why you are not doing everything you can to get this pipeline built as fast and as cheaply as possible," he warned.

"The commission's actions in the Independence pipeline case seem to indicate that you really don't want this pipeline built."

Citygate Constraints. The New York PSC approved a proposal by Rochester Gas and Electric Corp. For easing system constraints on the amount of pipeline nominations that can be made through each of the citygates used to supply RG&E's natural gas distribution system, by requiring gas marketers operating on the company's system to file plans with RG&E stating expected deliveries on each pipeline at different load levels for each month of the upcoming season.

When RG&E must shift load between the two delivery points and additional costs are incurred, it will impose a surcharge on marketers whose deliveries were not within the system constraints, and then pass back the amount collected to its retail customers.


Power Plants

Auction Prices. While conceding that the $47.5 million price tag ($119 per kilowatt) was "below outcomes from other generation asset auctions," the New York PSC approved the sale of the 400-MW Albany Steam Station to PSEG Power LLC.

The PSC dismissed allegations by the town of Bethlehem that the price was insufficient, saying that it came as the result of "an extensive marketing effort" to attract "the broadest available range of potential purchasers." The PSC also noted that differences in plant fuels, vintages, regional market prices, and other variables make comparisons among auctions difficult.

"While the Town complains that the station is more valuable than the prices PSEG Power offered, no bidder shared the Town's view," the PSC observed.

Generation Divestiture. The Pennsylvania PUC approved the sale by DQE Inc., parent company of Duquesne Light Co., of its seven electric generating plants to Orion Power Holdings of Baltimore for $1.7 billion. As part of the deal, Orion Power Holdings will become the provider of last resort to Duquesne Light customers.

Transfers to Affiliates. The Pennsylvania PUC OK'd generation asset transfers to non-regulated affiliates for both Baltimore Gas & Electric Co. and Public Service Electric & Gas Co.:

  • BGE would transfer to Constellation Generation Inc. its 20.99 percent stake in the Keystone Generating Station and its 10.56 percent stake in the Conemaugh Generating Station (all at book value), as well as its partial equity interest in Safe Harbor Power Corp., a hydroelectric power producer.
  • PSE&G would transfer its interests in Keystone (22.84 percent), Conemaugh (22.5 percent), and the Peach Bottom Atomic Power Station (42.49 percent) to PSE&G Power LLC and its wholly owned subsidiaries, PSEG Fossil and PSEG Nuclear, representing $2.443 billion in assets, to be recorded by the transferee at