Fortnightly Magazine - November 1 1995

Ohio Edison Rate Proposal Worth Watching

Ohio Edison Co. has asked the Ohio Public Utilities Commission (PUC) to reduce rates and cap base rates until 2006, thereby extending its present rate freeze for an additional 10 years. The plan, which is supported by the Office of Consumers' Counsel and the Industrial Energy Users-Ohio, would decrease base rates, currently frozen at 1990 levels, by almost $600 million over the next 10 years. Residential and small business rates would decrease by $1 a month until January 1, 2001, and by $1.50 per month thereafter.

Virginia Investigates Restructuring

The Virginia Corporation Commission has launched a formal investigation of electric industry restructuring and emerging competition (Case No. PUE950089), focusing on reliability, continuity and stability of rates, fairness to customers and investors, and whether truly competitive markets can be developed.

Time Warner Hits Local Telephone Markets

The Ohio Public Utilities Commission (PUC) has approved an application by Time Warner Communications of Ohio, L.P. to operate as a local exchange carrier in 37 counties in the state. The communications company already

provides cable television service in most of the counties. The PUC will wait to authorize the company to begin switching telephone calls until a separate docket resolves a number of generic issues associated with the advent of competition in the local telephone market.

Industrial Customer Pushes for Municipalization

The Common Council of Salem, NJ, has voted to study the feasibility of creating a municipal electric system that would compete directly with Atlantic City Electric Co. (ACE), the city's present electricity supplier. The proposal under discussion would establish a new utility in Salem; the city would not condemn ACE facilities nor prohibit ACE from operating within city limits.

Over the next few months, Salem will review power-supply options, solicit statements of interest to supply electricity to the city, and examine transmission and distribution requirements.

Maine Monitors Electric Telecom Ventures

The Maine Public Utilities Commission (PUC) has approved a settlement agreement governing restrictions on telecommunications ventures by Central Maine Power Co. Under the agreement, the utility must get PUC approval to enter the telecommunications market through a subsidiary except in the Northeast states and the Canadian provinces of New Brunswick, Nova Scotia, and Qu‚bec. In contrast to rules exempting smaller electric ventures from certain filing requirements, the utility must file a project application for all telecommunications ventures, no matter how small.


Electric industry restructuring is progressing at a rapid pace. Across the country, states are moving ahead to encourage retail competition. Two states have allowed retail wheeling experiments (Michigan and New Hampshire), utilities are proposing them, and over 20 states are studying the issue. Back in Washington, Congress is examining legislation to amend the Public Utility Holding Company Act (PUHCA).

IXC Market Share a Trade Secret

The Montana Public Service Commission (PSC) has ruled that market-share data filed by telecommunications interexchange carriers (IXCs) in a case governing pricing for intrastate intraLATA toll calls fits the legal definition of a trade secret. As such, the data deserved ongoing protection from disclosure to the public. The PSC added that whether releasing the information might serve a useful purpose (em such as invigorating competition in the marketplace (em was not a valid factor in deciding whether information should be protected.

Know Thy Customer

Companies in competitive industries routinely collect information about their customers through a variety of sources (em including surveys, national census, and government and private sources. Such customer information and its applications are jealously guarded secrets, rarely shared with others in the industry. Customer information is not limited to expenditure on a company's products or services, but usually includes a customer profile.

Marketing & Competing

Current utility marketing efforts focus almost entirely on large customers or "key" accounts, responding reactively to competitive threats such as self-generation, municipalization, and even geographic relocation. These threats have become all too real for many utilities. Niagara Mohawk Power Corp. has lost 15 percent of its large industrial load in the last 15 years. The recently negotiated long-term power contracts between Detroit Edison and the Big Three automakers are a conscious response to the looming threat of retail wheeling.