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News Digest

The California ISO offers a plan, but some fear that rules themselves are the problem.
Fortnightly Magazine - March 15 2001

with Reliant at Perryville, Louisiana. .-L.A.B.

Bi-Directional Flows. Finding no adverse impact, the FERC authorized Northwest Pipeline Corp. to roll in costs incurred to install and operate compressor units as needed to mitigate the impacts of operational flow orders (OFO) that arise on its bi-directional North/South transmission system because of changing relationships between U.S. and Canadian natural gas prices.

Because the Northwest system receives Canadian gas at its north end and Rocky Mountain gas at its south end, shippers have attempted to maximize the north flow capacity at times when Canadian supplies are more expensive than domestic supplies. That, in turn, has forced Northwest to invoke OFOs to ensure sufficient displacement capacity to accommodate firm obligations, and has forced some Northwest customers to buy more expensive Canadian gas supplies, forcing some plant closings and switching to alternative fuels. .-L.A.B.

State PUCs

Standard Offer Prices. Lamenting the need for price hikes, the Maine PUC doubled the standard offer generation charge for large business customers of Central Maine Power Co., from 5.95 cents per kilowatt-hour to 7.95 cents per kWh, which will increase overall rates for such customers by some 34 percent, after adding in the delivery charges for wires services, which range from 1.43 cents/kWh to 4.8 cents per kWh.

"I am deeply disappointed that prices have to be increased to this extent," lamented PUC Chairman Thomas Welch.

The PUC also OK'd standard offer rates for medium-size non-residential customers and approved two wholesale power contracts by which CMP will acquire the power needed to serve the medium class and all requirements for the large classes except Installed Capacity.

CMP has approximately 11,000 medium business customers (those with maximum demand between 20 kW and 400 kW). The standard offer generation charge for that class will double as well, rising from 5.67 cents per kWh to 8.52 cents/kWh, pushing total rates up to 12.97 cents/kWh, after adding in a delivery charge of 4.45 cents. .-L.A.B.

Service Terminations. Citing cold weather and high prices, Maryland banned all terminations of residential electric or gas service for nonpayment of bills for customers who this year or in the past, have either received or applied for low-income bill-paying assistance, and for customers for whom the utility has failed to verify such participation in low-income programs. The order marks the first such statewide moratorium in Maryland since 1979. .-L.A.B.

Wholesale Power Costs. On Jan. 29, Sierra Pacific Power and Nevada Power filed an emergency proposal at the Nevada PUC aimed at preventing the companies from becoming engulfed in the California power crisis. The plan would allow short-term emergency rate increases, ranging from zero for some low-usage customers, to 29 percent for the largest energy users, in order to help correct imbalances between wholesale and retail power costs. The average increase would be 17 percent.

The pending sale of generation assets required due to the merger of Sierra Pacific Resources and Nevada Power will allow the companies to buy power from the new plant owners at discounted prices for two years, but turmoil in California power markets has reportedly slowed the