Fortnightly Magazine - August 1995

The Long Island Power Authority (LIPA) plans to acquire the Long Island Lighting Co. (LILCO), to help reduce LILCO's high electric rates and improve Long Island's economy. To that end, LIPA has formed a public/private partnership with a private utility company that will provide extensive management services for LILCO. The utility partner has agreed to invest $100 million in the acquisition, contingent upon Gov. Pataki's approval. LIPA would create a subsidiary to acquire LILCO using tax-exempt bonds.

PSI Energy has filed a proposed tariff with the Indiana Utility Regulatory Commission (URC) that would allow new and expanding businesses in its service territory to choose their power supplier if their electric use increases to two megawatts or more. PSI said the tariff would give qualifying businesses access to the national electric market. It expects the URC to decide by the spring of 1996.

The Wisconsin Public Service Commission (PSC) has initiated a rulemaking to introduce an alternative method of calculating the tax equivalent for municipal utilities. The tax equivalent is calculated annually and represents the amount of money a municipal utility pays directly into the municipality's general fund. The rulemaking responds to concerns that the tax equivalent was excessive when compared to the gross receipts taxes paid by investor-owned utilities.

By a 2-1 vote, the Texas Public Utilities Commission (PUC) has placed a condition on approval of Houston Lighting and Power's (HLP) experimental tariff for special contract pricing (Rate Schedule SCP) with industrial customers whose electric power needs are or can be served by alternative sources of power: The floor of the rates must be designed to recover marginal costs (Docket No. 12957). The order on rehearing affirmed an earlier PUC decision shortening the term of the contracts from the proposed 7 to 10 years to 5 to 10 years.