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News Digest

Fortnightly Magazine - November 15 2000

rates for standard offer service to rise more than 0.001 cents per kilowatt-hour, because of the relatively higher cost of renewable energy resources.

At the same time, however, the regulators required utilities to offer an optional "green power" tariff for standard offer customers willing to pay more for larger amounts of renewable power.

Assuming a price of $.08 per kilowatt-hour for standard service without a renewable energy requirement, the new rule would allow a maximum allowable percentage rate increase of 1.25 percent for compliance with the renewable standard, or about $0.50 per month for a customer using 500 kWh per month. .

Industrial Incentives. With one commissioner dissenting, the New Hampshire PUC expanded a special rate discount contract for Pubic Service Co. of New Hampshire (PSNH) to cover additional factories operated by an industrial electric customer as an incentive to promote economic development in the state and add new jobs in manufacturing.

Dissenting commissioner Nancy Brockway objected, saying that applicants for special rate discounts should be held to a high standard, with claims of new jobs held "to rigorous scrutiny before being accepted as the basis for a major rate subsidy."

Brockway added, "Unlike the situation facing the customer in 1995, today there is a high likelihood of a general rate decrease for all customers, making the additional discount from a special contract less [relevant] in location and expansion decisions."

Brockway also expressed concern that incentive discounts could add to demand peaks with ISO New England, which has struggled of late with price spike problems during peak periods. .

Stranded Costs. The New Hampshire PUC also reversed an April order that had reduced allowable stranded costs for PSNH by some $78 million, now deciding that the order might cause the utility to lose eligibility to claim income tax deductions for accelerated depreciation, and noting also that the state's new electric restructuring law (SB 472, enacted June 12), requires a certain minimum level of customer savings from the PSNH restructuring plan. .

In a companion order, the PUC allowed PSNH to securitize stranded costs up to the limit allowed in the new law ($670 million), less $6 million for each month that elapses between Oct. 1, 2000 and the eventual startup date for electric competition in the state. The amount includes above-market costs ($558 million) for interests in the Seabrook and Millstone 3 nuclear plants, $97 million related to acquisition premiums and Financial Accounting Standard 107, and $15 million for premiums for financing and debt retirement. .

Gas Billing Practices. The Georgia PSC, aiming to quell an "utter state of confusion," proposed rules to force natural gas marketers to send bills to customers within 90 days after receiving a meter reading from the local distribution company, or pay penalties of up to $15,000 per violation, plus an added $10,000 per day for failure to comply. .

Firm Gas Capacity Rights. The Ohio PUC OK'd a tariff clause for retail gas supply choice by East Ohio Gas Co. to require competitive marketers to hold primary, firm capacity sufficient to meet 100 percent of peak