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News Digest

Electric Reliability
Fortnightly Magazine - June 15 2000

success of competitive markets in wholesale generation, the Alabama PSC allowed Alabama Public Service Co. to revise its longstanding plan for recovering the fixed costs of electricity supply. The revised plan will set a power rate factor based on the estimated cost of purchased power, excluding any energy charge costs recoverable through the utility's automatic adjustment clause.

Affiliate Rules. New Mexico regulators set a code of conduct governing anticompetitive practices in transactions between utilities and affiliates, covering issues ranging from access to transmission and distribution lines and disclosure of customer information. .

Supplier Certification. The Texas PUC set a public hearing for June 15 on proposed rules for certifying retail electric providers (REPs) in the newly competitive market scheduled to begin in 2002. Final rules were expected by late July.



Union Lockouts. A federal appeals court upheld a ruling by the National Labor Relations Board that Central Illinois Public Service Co. did not commit an unlawful labor practice when it "locked out" union employees who, in lieu of striking, had instituted "inside game" tactics, such as working "to the rule" and refusing voluntary overtime. The court said the utility was entitled to counter such activities.

Transmission Pricing. A federal appeals court ruled that an electric utility cannot unilaterally modify the terms of an existing transmission service contract under the doctrine, even though the contract rates are much higher than they would have been if negotiated at a later date under the provider's open access transmission tariff (OATT) filed under FERC Order 888, as long as the buyer only is acquiring "entitlements" power, and not "requirements" service.

The case involved Potomac Electric Power Co., which sought pricing relief on a transmission service contract it had signed with Allegheny Energy back in 1987 for delivery of power imports from Ohio Edison. Potomac Elec.

Municipal Franchise Fees. A Texas court ruled that where the PUC had OK'd a rate adjustment clause to allow electric utilities to bill ratepayers for franchise fees concurrently as such fees were paid to municipal governments, without a formal rate case, the utilities could not then call on the PUC to block the municipalities from later assessing retroactive increases in the franchise fees, billed to the utilities on a percentage-of-revenues basis.

Clean Air Act. A federal appeals court ruled that it was proper for Congress under the Clean Air Act to delegate authority to Native American nations (with consent from the Environmental Protection Agency) to regulate air quality on all land within tribal reservations, including activities conducted by persons not members of the tribe. Dissenting judge Ginsburg said that the delegation of authority should extend only to the development of tribal implementation plans.


Gas Pipelines

Certification. In a decision that drew the wrath of Sen. Frank Murkowski (Rep., Alaska), chairman of the Senate's Committee on Natural Resources, the FERC certified construction of the Independence and SupplyLink gas pipeline projects, but told project sponsors ANR and Transcontinental Gas Pipe Line Co. to first submit proof of contracts in hand with nonaffiliated companies to subscribe at least 35 percent of