Fortnightly Magazine - September 1 1995


Who's Tripping?

It requires a truly acrobatic stretch of the imagination to reach the same conclusions as Pennsylvania Commissioner John Hanger in his article, "Electric Reliability: How PJM Tripped on Gas-Fired Power Plants" (May l, 1995). The truth is that the natural gas system performed efficiently and reliably in January 1994, exactly as planned. The operators of the power plants in question purchased interruptible gas-transportation contracts to keep their fuel costs low.

Wash. Approves DSM Financing Plan

The Washington Utilities and Transportation Commission (UTC), in a case of first impression, has approved a request by Puget Sound Power & Light Co. to finance the full amount of its unamortized conservation investment through a new Conservation Asset Transaction and a Pooling Service Agreement. Estimated savings to the company associated with the financing arrangement total $22.7 million, with $19.9 million passed through to ratepayers and the rest allocated to the benefit of shareholders.

New Coalition Supports Fessler Proposal

A new coalition of 82 varied organizations (em including businesses, consumers, environmentalists, and utilities (em has announced support for the California Public Utility Commission's (CPUC's) majority proposal to restructure the electric industry.

D.C. Court Reviews DSM Rate Treatment

The District of Columbia Court of Appeals has upheld parts of a decision by the District of Columbia Public Service Commission (PSC) disallowing 25 percent of actual and projected

demand-side management (DSM) costs claimed by Potomac Electric Power Co. in a recent rate case. While agreeing that Potomac had failed to justify 100-percent recovery of its DSM costs, the court remanded the case to the PSC for a better explanation of why 25 percent represents an appropriate amount for the disallowance.

Beleaguered Columbia Gas Settles, Waits

The Columbia Gas System, Inc. (CGS) has reached an agreement, in principle, resolving the class action lawsuits alleging securities law violations following CGS's June 1991 major charge against earnings and the suspension of its common stock dividend. Those lawsuits were filed against CGS, certain officers and directors, the company's independent public accountants, and the underwriters for the company's 1990 common stock offering. The CGS portion of the proposed $36.5-million settlement would be $16.5 million. The remainder would be shared among the other defendants.

Canadian Regulators Move to Unbundle Gas Rates

After reviewing gas supply and related matters as part of a general rate case for Centra Gas Ontario, Inc., the Ontario Energy Board has directed its technical staff to develop a mechanism to separate the utility's commodity sales from its transportation and distribution functions. The Board said the move was necessary because competition in the sale of natural gas and the introduction of indexed pricing had made regulation of the utility's existing tariffed services difficult.

USEC Privatization Moves Forward

The United States Enrichment Corp. (USEC), the world's largest producer of uranium enrichment services, has submitted its privatization plan to President Clinton and Congress. The plan, mandated by the Energy Policy Act of 1992, suggests that USEC be sold to the private sector early in 1996 under a dual approach that simultaneously pursues a public offering of common stock and a negotiated merger or acquisition by a third party.

N.C. Expands Self-generation Deferral Rates

The North Carolina Utilities Commission (UC) has approved a North Carolina Power Co. plan to use its special self-generation deferral rate to persuade a large industrial customer to use utility supply for a planned plant expansion rather than existing self generation facilities. The UC rejected allegations that the discount to the Weyerhauser paper plant in Plymouth, NC, must pass a stricter analysis than past cases involving rate discounting guidelines because it applies to new load.


Suddenly, the U.K. electric industry holds more than academic interest for U.S. utilities. Up to now, it did not appear that many American utility executives had studied the British privatization. But the ongoing attempt at takeover of the U.K.'s South Western Electricity (SWE) by its American counterpart, The Southern Co., ups the ante considerably. If it comes to pass, Southern's acquisition of SWE will tap directly into the U.K.

N.C. Reviews QF Avoided-cost Rates

The North Carolina Utilities Commission (UC) has completed its latest biennial proceeding to establish rates and contract terms for utility power purchases from qualifying facilities (QFs).