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News Digest (July 15, 2001)

Fortnightly Magazine - July 15 2001

GPU operating electric companies to defer and accrue (through 2010) any purchased power costs incurred as a supplier of last resort that exceed its authority under rate caps to recover such costs from customers.

Customer rates will not increase under the settlement, but the shopping credit will rise for customers choosing direct access from competitive suppliers. Docket Nos. A-110300F0095 et al., June 14, 2001 (Pa.P.U.C.) .-L.A.B.

State PUCs

QF Incentives. California allowed the near-bankrupt Southern California Edison Co. to pay 15 percent of amounts owing to qualifying cogeneration facilities (QFs) for purchased power if QFs prove a need for the funds and agree to restart.

It also modified QF contracts with the state's three major investor-owned utilities to replace avoided-cost standard price terms with a fixed price of 5.37 cents per kilowatt-hour for a five-year term, with supplemental payments to QFs who prove higher fuel costs, and OK'd incentive payments to encourage QFs to increase electricity production, based on gas price indices at the Malin (North) and Topock (South) border import points. Decision 01-06-015, A. 00-11-038 et al., June 13, 2001 (Cal.P.U.C.) .-L.A.B.

Renewable Energy Portfolios. New Mexico asked its staff to propose a rule governing renewable energy portfolios by Aug. 15, citing the importance of fuel diversity. Utility Case No. 3619, May 15, 2001 (N.M.P.R.C.). -L.A.B.

SoCal Edison Rescue. California also OK'd parts of the rescue plan negotiated by Governor Gray Davis to keep SoCal Edison from slipping into bankruptcy, including three provisions of the memorandum of understanding signed April 9 between the utility and governor that calls for the state to buy the company's transmission lines (and which requires legislative approval). Decision 01-06-041, A. 93-12-025, June 14, 2001 (Cal.P.U.C.). -L.A.B.

QF Avoided Costs. Utah ordered PacifiCorp to re-calculate avoided costs for setting prices for power purchases from QFs in a way that reflects the current market prices (based on a hypothetical proxy plant- either a simple-cycle gas turbine peaking plant, or a base-load combined-cycle turbine), and also the specific time intervals that would be required to construct new peaking and base-load power plants. Docket No. 01-2035-01, June 13, 2001 (Utah P.S.C.). -L.A.B.

Billing Practices. New York took recommendations on business practices for retail energy services submitted jointly by the Edison Electric Institute, the Coalition for Uniform Business Rules, the National Energy Marketers Assoc., and the Electric Power Supply Assoc., and on reviewing comments, adopted a new section for its Uniform Business Practices (UBI) addressing billing and payment practices, based on a "multi-retailer" model, to be effective when the new electronic data interchange (EDI) protocols for bill and payment processing become operational ( see Case 99-M-0667 ), presumably by the end of the year. Case Nos. 99-M-0631, 98-M-1343, May 18, 2001 (N.Y.P.S.C.). -L.A.B.

Studies & Reports

LNG Growth. The market for liquefied natural gas should double in size in the next 10 years, according to a new study, "Global LNG Trade," by Emerging Markets Online.

Many factors combine today to boost LNG growth, the report says, including increased competition in LNG trade, and ever-rising demand for natural gas, falling costs of