Fortnightly Magazine - November 1 1995


Dan W. Reicher was named acting assistant secretary for policy at the U.S. Department of Energy. Reicher has served as deputy chief of staff and counselor to Secretary of Energy Hazel R. O'Leary since 1993 and was a member of the Clinton-Gore transition team. Reicher replaces Jack Riggs, who left to take a senior position at the Aspen Institute.PECO Energy Co. selected William H. Smith III as v.p. and group executive of its new Telecommunications Group. Stepping into his seat as nuclear support v.p. is Drew Fetters.

James H.

Md. Rejects Restrictions on Diversification

The Maryland Public Service Commission (PSC) has decided against requiring regulated utilities to obtain prior approval for nonutility activities or diversification plans. The PSC also rejected a proposal that utilities pay a royalty to consumers of regulated services to account for

intangible benefits gained by the unregulated subsidiaries. The case involved complaints regarding merchandise and appliance services provided by Baltimore Gas and Electric Co. (BG&E).


What's in a Name?

Charles Studness's article "CPUC Chooses Reregulation over Deregulation" (Financial News, July 15, 1995) reminds me of Humpty Dumpty's scornful remark in Lewis Carroll's Through the Looking Glass: "When I use a word, it means what I choose it to mean (em nothing more nor less."

When Studness discusses "deregulation," it is clearly what he chooses it to mean (em not what the California Public Utilities Commission (CPUC) proposes in its May 24 majority decision on deregulating the electric utility industry.

Wash. Champions Ratepayers Over Competition

The Washington Utilities and Transportation Commission (UTC) has issued an interim policy statement in its ongoing inquiry into regulatory tools to encourage the development of new resources by regulated monopoly utilities.


Is Too! Is Not!

In the August 1995 Mailbag, Mr. Michael Yokell claims our May 15, 1995, article ("It Ain't in There: The Cost of Capital Does Not Compensate for Stranded-cost Risk") "is simply wrong" and "nonsensical on its face" because we fail to distinguish between the cost of capital before and after the stranded-cost issue arose.

In fact, it is Mr.

Utility Impedes Competition in Ohio

The Ohio Public Utilities Commission (PUC) has concluded that an Ohio Edison Co. contract to provide thermal cooling service to the Mahoning County Jail, at revenues below the actual cost of providing service, was negotiated for the purpose of destroying competition. A competing thermal services company, Youngstown Thermal Limited Partnership, had alleged that Edison proposed to engage in the cooling business without PUC authorization and at a below-cost rate that violated PUC rules.

N.Y.'s Pataki: Dissolve LILCO

New York Gov. George E. Pataki wants Long Island Lighting Co. (LILCO) dissolved to reduce electricity rates on Long Island. LILCO presently has the second-highest residential rates in the nation (Maui Electric Co.'s are highest) (em 16.8 cents per kilowatt-hour (›/Kwh), compared to the national average of just 8.8›/Kwh. Pataki has asked the Long Island Power Authority (LIPA) to draw up a plan that: 1) cuts rates in Nassau and Suffolk counties, 2) cuts rates by "double digits,"

3) protects Long Island residents from any property tax hikes, and 4) increases competition.

Retail Wheeling Rates Upheld

The Michigan Public Service Commission (PSC) has denied requests to modify its newly instituted retail wheeling experiment (see 161 PUR4th 441). However, the PSC did clarify its ruling to permit a form of "self-service" wheeling by the Dow Chemical Co. (em a limited partner, along with Consumers Power Co., in the Midland Cogeneration Venture (MCV). Dow had asked the PSC for an exemption from restrictions on participation by utility affiliates as third-party providers in their own service territory.

Texas Outlines Access, Comparability Terms

The Texas Public Utilities Commission (PUC) has issued its proposal for achieving electric transmission access and full wholesale competition (Project No. 14045).To achieve comparability, all utilities would be required to use their own transmission systems for all purposes at the same prices and under the same terms and conditions they apply to third-party transmission customers.

R.I.: Competition Must Reduce Rates for All

Working to identify a set of specific issues for consideration in its investigation of competition and open access for the electric industry, the Rhode Island Public Utilities Commission (PUC) has refused to permit additional costs for environmental improvements and the development of renewable resources.