DC

Concluding an investigation of supply-cost recovery for the Associated Natural Gas Co., a natural gas distribution company (LDC), the Missouri Public Service Commission (PSC) has found imprudent the LDC's long-term supply contract with an affiliated supplier, SEECO, Inc. The PSC excluded from adjustment clause recovery one-half the premium paid above spot-market prices under the contract for firm fixed-price swing-gas supply. The PSC said the LDC failed to properly evaluate other gas suppliers prior to entering into the contract or to document its gas purchasing practices.

The New York Public Service Commission (PSC) has modified an earlier ruling (Re Restructuring of the Emerging Competitive Natural Gas Market, 158 PUR4th 553 (N.Y.P.S.C. 1994)) that set forth a policy framework to guide the post-Order 636 transition of the state's natural gas distribution industry. The 1994 ruling divided local distribution company (LDC) customers into core and noncore groups, and allowed flexible market-based pricing for unbundled services to the noncore group.

Did you hear the one about the middle-aged utility executive who became depressed about plans to restructure his company? It seems he couldn't cope with how fast things were changing. So he threw himself in front of a glacier.

That story comes from a meeting I attended back in October, styled Executive Visioning Workshop, sponsored by Arthur D. Little, Inc., which attracted some 21 energy industry executives.

Question: Will your commission still be around in the year 2000? If so, what will it look like? Are you restructuring your commission with the same fervor you devote to electricity, gas, and telecommunications?Response by Nancy McCaffree, Chair, Montana Public Service Commission:

As a regulator I have had the opportunity to listen to economists, energy planners, and other professional soothsayers. I have come to the conclusion that the only certainty pertaining to future forecasts is that they will be wrong 100 percent of the time.

The Minnesota Public Utilities Commission (PUC) has authorized Northern Minnesota Utilities, a natural gas local distribution company (LDC), to insulate shareholders from the effects of losing a large firm sales customer by reallocating associated demand costs among remaining firm customer classes. It allowed the LDC to pass the increased costs through its purchased adjustment clause, finding that the utility was now alerted to the problem and had taken action to protect itself and its ratepayers from stranded costs caused by customers switching to interruptible transport service.

The Massachusetts Department of Public Utilities (DPU) has accepted a settlement agreement calling for approval of gas-forecasting, supply-planning and demand-side management (DSM) efforts by Berkshire Gas Co., a natural gas local distribution company (LDC). Nevertheless, the DPU directed the LDC to undertake a good-faith effort to quantify avoidable environmental costs

and to incorporate those findings in rescreening its DSM options.

One of the iron rules of competition and open markets is that there are winners and losers. Winners tend to win very big; losers tend to lose everything and disappear, through absorption or insolvency. As deregulation takes hold, high-cost producers and less adroit managers may find themselves steamrollered by emerging strongmen and entrepreneurial upstarts. These rivals may usurp segments of their business by bidding the job cheaper and still making money, leaving a rising tide of shareholder suits in their wake.

Southwestern Public Service Co. (SPS) and Public Service Co. of Colorado (PSCC) have entered into a definitive merger agreement to form a public utility holding company that will cover one of the largest geographic areas in the nation. Size apart, the merger is unique in that SPS operates as part of ERCOT, and the two utilities are not interconnected. A new transmission line will be built to connect the two companies.

The new holding company will have combined annual revenues of $3 billion, and assets of $6 billion.

Joseph Santaniello has been named director of management information systems for NUI Corp. He was previously director of engineering at Elizabethtown Gas, NUI's New Jersey operating division. Stephen Liaskos, formerly controller at Metallgesellschaft Corp., joins NUI as controller. Michael A. Palecki, most recently of the Florida Public Service Commission, has been named v.p. of regulatory affairs for NUI's southern division.

BICC Utility Cable Co.