[BETA] Fortnightly

There is a price to pay for becoming a lean, mean fighting machine, and utilities paid the price in 1994.

A number of electric utilities saw revenues increase last year on the strength of higher sales, but the costs associated with laying off hundreds of employees and downsizing company operations took a significant bite out of earnings.

A PUBLIC UTILITIES FORTNIGHTLY survey of the nation's top 20 electric utilities shows an increase in their combined 1994 revenues to $107 billion, a healthy 3.6-percent rise over the previous year.

Consumers Power Co. has asked the Michigan Public Service Commission to approve a Special Competitive Service (SCS) rate to help retain industrial customers who threaten to leave the system. The SCS rate would be offered to customers who can obtain their power elsewhere and to new customers considering locating or expanding facilities in Michigan. "[A]pproval of this rate would grant Consumers Power the ability to negotiate special contracts with certain `at risk' large industrial customers which have competitive energy supply options," says Michael G.

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.

The Michigan Public Service Commission (PSC) will require Energy Michigan (em a nonprofit corporation whose members promote expanded use of cogeneration, IPPs, and waste-to-energy projects (em to provide Consumers Power Co. with information concerning the extent of existing and proposed self-generation projects that pose a competitive threat. The PSC directed Energy Michigan to answer interrogatories served by Consumers after Energy Michigan intervened in a proceeding concerning a new "competitive tariff" proposed by the utility.

Commercial and industrial customers of Consumers Power Co. paid almost $500 million above their actual cost of service to subsidize residential customers over the past five years, claims John W. Clark, Consumers Power senior vice president. "The current subsidy of residential electric rates by Michigan industry is shortsighted and costs Michigan jobs," he told a business roundtable in Detroit.