Fortnightly Magazine - April 1 1996


On a bookshelf behind my desk I've stacked up a few older issues of PUBLIC UTILITIES FORTNIGHTLY. Some of them go back more than a half-century. Every so often I pull down a copy to see if I can learn anything from history.

Yes, the advertisements appear quaint (Royal typewriters; IBM punch-card machines; Ditto-brand duplicators). But some of the ideas still have legs, with lively quotations from the likes of Louis Brandeis, Harold Ickes, Walter Lippmann, and Fiorello La Guardia.

In Brief...

Sound bites from state and federal regulators.

Gas System Acquisitions. Alabama Gas Corp. can proceed to acquire gas distribution system of City of LaFayette, AL, and apply systemwide rates to all new customers. Order affirms capitalized income method to set fair-market value for the acquisition, rejects proposal by the Attorney General to switch to a discounted cash-flow method. Dkt. U-3644, Jan. 8, 1996 (Ala.P.S.C.).

Low-income Discounts.

LDC Acts to Retain Large Customers

The Maine Public Utilities Commission (PUC) has authorized Northern Utilities Co., a natural gas local distribution company (LDC), to offer a special rate to extra-large firm sales customers. The new offering is designed to enable large customers with flat loads to obtain gas service at a rate that better reflects the lower nongas cost of service for such customers. Unusually large customers

wishing to take service under the new rate must demonstrate that their load is largely flat and, thus, maximizes the nongas costs of serving their needs.


Ann R. Chamberlain will manage rates and regulations, and plan and procure gas supplies in her new v.p. position with Virginia Natural Gas, Inc. She steps up from assistant v.p.

Boston Pacific Co., Inc. has added John T. Chang to the company's international power project development practice. He comes from Iroquois Gas Transmission System. Jonathan d'E. Coony was promoted to consultant and will continue work on financial evaluation of power projects in Indonesia, Pakistan, and other countries.

Telephone Price-cap Plan Seen Working

The Tennessee Public Service Commission (PSC) has directed South Central Bell Telephone Co., a local exchange carrier (LEC), to reduce rates by $56,285 million under its existing price-cap regulation plan. According to the PSC, the LEC had achieved overall earnings "well above the authorized rate of return" during the rate period ending March 31, 1995.

LDC Aggregates Transportation Loads

The Florida Public Service Commission (PSC) has approved a proposal by Peoples Gas System, Inc. to make gas transportation service available to customers that use more than 500,000 therms of natural gas, in the aggregate, at multiple delivery points within its service territory. To qualify, the multiple facilities must be directly owned and operated in the name of a single customer of record. The rates will be the same as those charged under the otherwise applicable sales tariff, less the purchased-gas adjustment charge.


The article "Electric Utility Mergers: The Answer or the Question?" (by Robert J. Michaels) in the January 1, 1996, issue, along with current events involving my employer, a midwestern utility currently involved in a merger, initiated some questions and comments regarding top executives chairmen.

We expect continued mergers and acquisitions (M&A) in the continental United States until 50 or fewer utilities serve the nation.

Energy Competition Warrants Heat Pump Promotion

Citing competition in residential energy markets, the Connecticut Department of Public Utility Control (DPUC) has approved a new heat-pump rate discount and installation rebate program proposed by United Illuminating Co. (em but with an eye trained on market share.

The DPUC acknowledged a prior reluctance to approve tariffs that promote specific end uses, but found that competition justified new approaches. It also cited other positive factors, including: 1) the utility's long-term surplus capacity outlook, 2) its low marginal cost, and 3) heat pump efficiencies.

Arkansas Oks Weather Normalization for LDC

The Arkansas Public Service Commission (PSC) has authorized Arkla, a division of Noram Energy Corp. and a natural gas local distribution company (LDC), to apply a weather normalization adjustment to billings from November through April. Finding that the new clause did not constitute a "general rate increase," the PSC rejected procedural objections that it failed to meet certain notice requirements.


SCEcorp has a new corporate structure and name: Edison International. It also has a new subsidiary, Edison Source, which specializes in solutions for energy efficiency, the environment, and energy marketing. Edison International now has five subsidiaries; its flagship, Southern California Edison, is the nation's second-largest IOU.