With a CTC likely to cover stranded costs,
aggregators must somehow find power cheap
enough to offer real savings.
Retail aggregation: Wherever you stand, it appears 1998 could be the year of reckoning.
By then (em say those watching the future of aggregation in the "leader" states of California, New York, Massachusetts, and New Hampshire (em rulemakings will have sorted out the issues of stranded costs, distribution, and reliability.
High industrial electricity rates are often blamed upon current regulation. Some state regulators respond with broad-based reforms; others simply reallocate system costs from industrial rate classes to rates for more inelastic customers (em namely, residential users.
The New York Public Service Commission (PSC) has ordered New York Telephone Co., a telecommunications local exchange carrier (LEC), to notify customers that they may now choose an alternative carrier for intraLATA toll calling. Interexchange carriers (IXCs) in the state had complained about the LEC's plans to implement a recent PSC order requiring equal access for intraLATA toll services.
Public utility stocks showed no signs of letting up during the fourth quarter of 1995. The Public Utilities Stock Index rallied a brisk 234.66 points, or 6.38 percent, to close at 3910.01. Not to be outdone, the Dow Jones Industrial Average gained 355.86 points, or 7.47 percent, to close at 5117.12, and the S&P 500 Stock Index climbed 34.21 points, or 5.88 percent, to close at 615.93.
Certain stocks sparkled more than others:
SCANA Corp.
Nowhere are the failings of traditional utility regulation more evident than on Long Island. The New York Public Service Commission (PSC) has raised rates for the Long Island Lighting Co. (LILCO) 31 percent since 1989. Rates are now over twice the national average (em the highest in the continental United States. Meanwhile, Long Island's economy has been ravaged by defense cutbacks that have erased 100,000 jobs (em a 10-percent drop in employment.
The New York Public Service Commission (PSC) has approved its first market-indexed incentive mechanism to encourage a local distribution company (LDC) to control gas-supply costs. Brooklyn Union Gas Co.'s modified proposal for a one-year pilot incentive mechanism employs an external index as a gas-cost target (the monthly closing natural gas contract price on the New York Mercantile Exchange), rather than a series of internal cost measures based on estimated fixed and variable costs.
Having committed to employing competition in the telecommunications local exchange carrier (LEC) market to elicit the broadest range of service offerings while ensuring fair rates, state commissions are now establishing regulations to put the new policies into effect. Current investigations focus on the proper costing and rate-setting methods for interconnection and transport services among newly competing carriers.
The New York Court of Appeals, affirming a lower court ruling (Rochester Telephone Corp. et al. v. New York Public Service Commission, 201 A.D.2d 31, 155 PUR4th 511 (N.Y.App.Div.)), has upheld the authority of state regulators to use a "royalty" to reduce rates for services provided by local exchange carriers (LECs). The royalty was designed by the New York Public Service Commission (PSC) to compensate ratepayers for transfers of
intangible assets to unregulated subsidiaries.
The New York Public Service Commission (PSC) has proposed accelerated restructuring of the electric industry in Phase II of its "competitive opportunities" proceeding (Case No. 94-E-0952). The proposal calls for wholesale competition by 1997, retail competition by 1998, separating generation from transmission and distribution, and forcing utilities to absorb a portion of their stranded investment.
Moody's Investors Service believes the proposal has generally negative credit implications for New York's investor-owned utilities.
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.