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News Digest

Transmission & ISOs
Fortnightly Magazine - June 1 2000

Southern California Gas Co. endorsed the PUC's complaint, asking why the FERC cited excess capacity in the California market in July 1999 in approving the prior Dynegy contract, but yet found a need to expand gas pipeline capacity into California in January, in approving a certificate for pipeline construction for the Questar Southern Trails Pipeline.

In its answer, El Paso distinguished the Dynegy and Enron deals, noting that those contracts were fashioned under the FERC's negotiated rate policy, and remained subject to review, whereas the latest contracts with its affiliates reflect rates, terms, and conditions already authorized under El Paso's filed tariff, and thus should raise no objection.

But Southern California Edison countered that "El Paso has established a perfect identity of interests between itself and its shipper by selling the capacity to its marketing affiliate ... Ironically, because of this identity of interests, the [contracts] here did not need to be negotiated ... as a result [they] were not before the commission as a matter of course."



QF Status. A federal appeals court has ruled that a small power facility that sells all of its gross power output can still retain its status as a "qualifying facility" under the Public Utility Regulatory Policies Act if it received certification from the FERC before the commission changed its policy and barred QF status for such plants in a 1991 order. Connecticut Valley Elec. Co. v. FERC, No. 98-1294, April 14, 2000 (D.C.Cir.).

Demand-Side Management. The Idaho Supreme Court affirmed an Idaho PUC order allowing Idaho Power Co. to accelerate recovery of deferred demand side management expenses from a 24-year period to a five-year period, without a general rate proceeding, but with a decrease in the allowed carrying charge to reflect the lesser risk of accelerated cost recovery.

Emissions Monitoring. A federal appeals court set aside a guidance document issued by the Environmental Protection Agency that directed state officials to issue new emissions-monitoring requirements for stationary sources, on finding that the EPA had amended its regulations without appropriate notice and comment.

As the court said: "the entire Guidance, from beginning to end...reads like a ukase."

Utility Pole Attachments . In a 2-1 vote a federal appeals court ruled that sec. 224 of the Telecommunications Act does not give authority to the Federal Communications Commission to regulate attachments to utility or telephone poles by wireless carriers, nor attachments used to provide Internet access.

The three judges agreed that the FCC's current pole attachment rules effect a "taking" or private property of utilities, but said the issue was not yet ripe for a constitutional review.

State Restructuring Plans. A state appeals court upheld rulings by the state utilities board that OK'd a restructuring plan and securitization of stranded costs for Public Service Electric and Gas Co., even though the board had not opened all hearings to the public and had even begun some hearings even before the enabling legislation was enacted.


Transmission Pricing: California's Grid Gambit

In a bold attempt to expand its reach, the state's ISO proposes a sweeping new scheme for