Fortnightly Magazine - March 1 1996

Kentucky Settles Trimble Dispute

After well over a decade, the Kentucky Public Service Commission (PSC) has finally concluded a long-standing dispute governing rate treatment for Louisville Gas & Electric's investment in the Trimble County generating facility. In 1989, the PSC disallowed 25 percent of the 495-megawatt coal-fired plant from rate base. Under the newly approved agreement, the utility will refund current customers $22 million: $5.3 million is reserved to special contract customers, and the balance will be refunded to all other customers through a per-kilowatt-hour credit over a five-year period.

Byline: 
Phillip S. Cross
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Mojave Gets Green Light, But Troubles Persist

The Federal Energy Regulatory Commission (FERC) has issued an order denying rehearing, effectively allowing Mojave Pipeline Co. (MP) to construct and operate its Northward Expansion Facilities in California (Docket No. CP93-258-007). The FERC has already issued five substantive orders in the proceeding.

Especially contentious was the clash with the California Public Utility Commission (CPUC) over jurisdiction, leading to a February 1995 FERC order holding that the Northward Expansion was an interstate pipeline subject to federal oversight.

Byline: 
Lori A. Burkhart
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The Year Ends With a Bang

Public utility stocks showed no signs of letting up during the fourth quarter of 1995. The Public Utilities Stock Index rallied a brisk 234.66 points, or 6.38 percent, to close at 3910.01. Not to be outdone, the Dow Jones Industrial Average gained 355.86 points, or 7.47 percent, to close at 5117.12, and the S&P 500 Stock Index climbed 34.21 points, or 5.88 percent, to close at 615.93.

Certain stocks sparkled more than others:

SCANA Corp.

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Colorado Revamps DSM Inquiry

The Colorado Public Service Commission (PSC) has renewed its commitment to rate recovery of costs associated with utility-sponsored demand-side management (DSM) programs. At the same time, however, it has formally rejected a series of broader-based rate reforms under development since 1991. The rulings came in a case involving the Public Service Co. of Colorado, an electric utility. The PSC found a "ubiquitous lack of support" for mechanisms to encourage utility conservation investments that could reduce total system costs, but might also reduce sales levels.

Byline: 
Phillip S. Cross
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DSM Gets Expensed in North Dakota

The North Dakota Public Service Commission (PSC) has approved a request by Northern States Power Co., an electric utility, to treat all of its demand-side management (DSM) expenditures as expenses rather than capitalizing them. The PSC found that the change would strengthen the company's financial and competitive positions as it initiates its transition to a restructured electric industry.

In a 1992 rate order the PSC directed the utility to capitalize a substantial portion of the DSM costs over a five-year period.

Byline: 
Phillip S. Cross
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States Review Market-based Electric Rates

The Massachusetts Department of Public Utilities (DPU) has approved a new

"market-based" electric tariff for Fitchburg Gas & Electric Co., a combined electric and gas utility. The "Energy Bank Service" for new or expanding industrial customers offers rates competitive with average U.S. industrial rates.

Byline: 
Phillip S. Cross
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Merger to Benefit LDC Gas Procurement Efforts

The Iowa Utilities Board (IUB) has permitted MidAmerican Energy Co. (em the corporate parent of recently merged Midwest Gas and Iowa-Illinois Electric and Gas Co. (em to include combined gas-procurement performance data as part of an experimental gas-supply incentive program originally designed for MidWest Gas alone. The IUB rejected a proposal to terminate the program and consider separate programs for the companies, finding an artificial separation of the performance data of the now-combined gas-supply departments unproductive.

Byline: 
Phillip S. Cross
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Off Peak

Fee Simple? Utility Board Directors Get Less Than Peers

How do fees for utility board directors match up to those at other companies? Not too shabbily, as the following data show, but on the whole more modestly.

The Spencer Stuart SSBI Survey traced Board trends, based on proxy data, at 100 of the nation's leading publicly held corporations. The companion UI Survey focused on Board compensation at the 50 largest publicly owned utilities.

Byline: 
Jonathan A. Crystal
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Decoupling Charge to Expire

The Washington Utilities and Transportation Commission (UTC) has turned back a pre-merger attempt by Puget Sound Power and Light Co. to make permanent a $165.5-million rate increase allowed under its periodic rate adjustment mechanism (PRAM). (The PRAM is designed to remove disincentives to utility conservation efforts by "decoupling" revenues from sales levels and relying instead on a revenue-per-customer approach to cost recovery.) Puget had earlier agreed to defer a scheduled base-rate filing pending the UTC's review of its proposed merger with Washington Energy Co.

Byline: 
Phillip S. Cross
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