Calendar of Events

Aug 04, 2014 to Aug 15, 2014 | Michigan State University, East Lansing, MI
Aug 11, 2014 to Aug 12, 2014 | New York, NY
Sep 08, 2014 to Sep 10, 2014 | Chicago, IL

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Public Utilities Reports

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Commission

SEC Cost Approves Valid for FERC

Phillip S. Cross

The U.S. Court of Appeals for the Sixth Circuit, following an earlier decision by the District of Columbia Circuit, has rejected claims by Ohio municipal utilities that the Federal Energy Regulatory Commission (FERC) erred when it allowed Ohio Power Co. to recover the full cost of coal paid to affiliated suppliers without applying a "comparable market test" to make sure the costs were reasonable.

Tennessee to Review LDC Transition Costs

Phillip S. Cross

The Tennessee Public Utilities Commission (PUC) has opened a generic proceeding to establish a policy governing recovery of Order 636 pipeline transition costs by natural gas local distribution companies (LDCs). The PUC noted that one LDC, Nashville Gas Co., is currently recovering costs from all customer classes based on total system throughput, but has agreed to halve the charge for interruptible customers. Other LDCs use different methods to assess the costs to customers.

Discount Tariff Hits Snag

Phillip S. Cross

The Michigan Public Service Commission (PSC) has dismissed an application by Consumers Power Co. for authority to implement its controversial "Rate K" competitive tariff for electric service. The utility had claimed that greater pricing flexibility was necessary to meet substantial competition from self-generation, new municipal utilities, and utilities outside the state, but the PSC found that due to numerous objections to the rate plan and subsequent modifications of the proposal by Consumers, the proceeding had become so complex that the docket should be closed.

Court Limits State Review of QF Buyouts

Phillip S. Cross

The U.S. Court of Appeals for the Third Circuit has ruled that the New Jersey Board of Public Utilities (BPU) is preempted under the federal Public Utility Regulatory Policies Act (PURPA) from ordering a qualifying facility (QF) and an electric utility to renegotiate or settle on a buy out of a previously approved purchased-power agreement. The QF, Freehold Cogeneration Associates, L.P. had refused to alter its contract with Jersey Central Power & Light Co.

Florida Approves Decoupling Mechanisms

Phillip S. Cross

Florida Power Corp. has won approval for a three-year experiment to remove existing disincentives to investment in conservation programs by "decoupling" residential revenues from sales for ratemaking purposes. The mechanism permits customer surcharges and refunds if revenue levels vary from targeted levels.

The new mechanism relies on a per customer revenue target figure based on the allowed revenue and average residential customer count used in the company's last rate case.

Court Reject FCC's Flexible Pricing Again

Phillip S. Cross

The Federal Communications Commission (FCC) has been rebuffed yet again by the courts in its effort to relax tariff filing requirements for nondominant common carriers. The U.S. Court of Appeals for the District of Columbia Circuit thwarted the FCC's latest attempt, rejecting proposed rules that would permit the nondominant carriers to file a range of rates rather than fixed rates tied to a schedule of charges.

The courts had earlier overturned a series of FCC rulings.

Financial News

Charles M. Studness

The process of determining how to implement utility competition is often cast as a struggle between two opposing camps: shareholders and ratepayers. There are, of course, two other major players, managements and regulators. The bipolar view tacitly assumes that shareholder and management interests coincide, and that regulators have customer interests at heart. Neither assumption is altogether valid. Shareholder interests deviate from management interests in important ways, just as the interests of the entrenched regulatory bureaucracy diverge from the public interest.

Wisconsin "Comparable" Network Service Moves to FERC

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has reviewed network transmission tariffs filed by Wisconsin Public Service Corp. (WPS) and Wisconsin Electric Power Co. (WEPCO) in compliance with a Wisconsin Public Service Commission (PSC) order requiring a FERC tariff that provides network service comparable to the service the utilities reserve for themselves. The case arose out of applications filed at the PSC by four utilities in late 1990 and early 1991.

FERC Slams Tennessee Gas on Order 636

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has accepted and suspended tariff filings made by Tennessee Gas Pipeline Co. (TGP), ordering its staff to convene a technical conference on various issues related to TGP's post-restructuring compliance (Docket Nos. RP95-88-000 and RP95-112-000). The issues under investigation include capacity release, storage, and scheduling, as well as TGP's proposed $118-million rate increase. The FERC noted that TGP's customers "have expressed a high degree of dissatisfaction" with service from TGP. Commissioner James J.

FERC Favors Regional Solutions to Loop Flows

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has opened a paper hearing on electric loop flow issues arising from the unscheduled flow mitigation plan filed by the Western Systems Coordinating Council (WSCC) (Docket No. ER95-215-000). WSCC members have endured loop flow problems in their region for over 20 years. Expanding on previous ideas, the plan includes the coordinated operation of "controllable devices," such as phase-shifting transformers, that can reduce the level of unscheduled flow by altering power flows on parallel alternating current transfer paths.

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