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Fortnightly Magazine - February 15 1995

NY Accepts Vertical Disintegration

Lori A. Burkhart

Finding the present industry structure incompatible with effective wholesale or retail competition, the New York Public Service Commission (PSC) has issued for comment a set of regulatory principles designed to guide the transi-tion to a more competitive electric industry (Docket C94E0952/94086). It said that the transition requires vigorous fair trade safeguards and forward-looking labor/management relations.

Wisconsin Approves Performance Incentive Mechanisms

Phillip S. Cross

While lowering current rates for electric gas and water services provided by Wisconsin Power & Light Co., the Wisconsin Public Service Commission (PSC) has also approved a series of gas and electric incentive mechanisms for the utility.

The ratemaking modifications include a natural gas procurement incentive that works through the company's adjustment clause and includes a link to spot commodity prices for gas supply as well as a sharing mechanism to allocate the risk of cost changes between ratepayers and shareholders.

Perspective

Richard A. Abdoo

Our industry stands at the threshold of significant change. Competitive forces and significant technological advances beckon the nation's electric utilities to step forward. The electric industry has the opportunity to create a future that provides the benefits of competition to all customer groups. If we don't restructure, someone else will do it for us.

Idaho Seeks Improvements in LEC Regulatory Plan

Phillip S. Cross

The Idaho Public Utilities Commission (PUC) has decided to continue its five-year-old revenue sharing plan for U S WEST Communications, a local exchange telephone carrier, for one year. It initiated a workshop to develop a new regulatory plan for the carrier, and also proposed specific quality-of-service standards and penalties due to a recent decline in service quality.

The Market Transition: Is FERC Pricing Policy on the Wrong Side of the Road?

Charles E. Bayless

In the United States, the Federal Energy Regulatory Commission (FERC) has undertaken the task of guiding the electric power industry from regulation to competition. But unless the FERC develops a plan to consider all facets of electric deregulation at the same time, we may end up driving on the wrong side of the road.

Last October the FERC issued its policy statement on electric transmission pricing. See, Inquiry Concern. Pricing Policy for Trans. Servs.

Nuclear Waste Reform Among First Energy Bills

W. Lynn Garner and Lori A. Burkhart

Over 300 bills were introduced in the first week of the new Congress that convened in January, among them a bill by Sen. J. Bennett Johnston (D-LA) aimed at correcting the government's seriously flawed nuclear waste storage program. Johnston heralded S.

How State Regulators Should Handle Retail Wheeling

Kenneth W. Costello, Robert E. Burns, and Youssef Hegazy

By Kenneth W. Costello, Robert E. Burns, and Youssef HegazyThe electric power industry is next in line for dramatic change. Competition has edged into individual markets, particularly the bulk-power market. This move toward competition has provoked debate in several states over the merits of retail wheeling. Specifically, should retail customers have the right to purchase their power requirements from sources other than the local utility? Many states have addressed the issue in different forums, at different levels of intensity.

FERC to States: No QF Rates Higher than Avoided Cost

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has ruled that states may not set rates higher than a utility's avoided cost for power purchases from qualifying facilities (QFs) (Docket Nos. EL93-55-000 and

EL87-53-003). The new rule comes as part of a case in which Connecticut Light and Power Co.

How Stranded Will Electric Utiliites Be?

Eric Hirst and Lester Baxter

Stranded commitments (SC), because they are potentially huge, may be a show stopper for increased competition in the U.S. electricity industry. Utility shareholders, industrial customers, and small commercial and residential customers are likely to wage tough battles before state and federal regulatory commissions as they seek to reduce their exposure to these costs.

Telecommunications Reform Effort Renewed

Lori A. Burkhart

The seven regional Bell operating companies have formed a coalition (em the Alliance for Competitive Communications (em to spearhead their efforts to reform the nation's telecommunications laws. The group's central goal is to eliminate barriers to competition among local telephone, long-distance, and cable television companies by:

s Encouraging competition in all markets

s Protecting universal service

s Opening markets to all competitors at once

s Ensuring that all competitors in each market are regulated similarly.

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