Fortnightly Magazine - April 15 1996

Gas Restructuring Leaves Doubts About IRP

In a case reviewing standards for integrated resource planning (IRP) set out in the Energy Policy Act of 1992 (EPAct), the Pennsylvania Public Utility Commission (PUC) has recognized that changes in the natural gas industry, combined with an evolution toward competition (both upstream and inside the city gate), "will make gas IRP a less-necessary commission function in order to insure least-cost gas service."

The PUC said most of its existing regulations were consistent with the federal standards; however, it rejected the EPAct standards regarding guaranteed profitability an

Midwest ISO Would Link ECA, MAIN

Six midwestern utilities have agreed to establish an independent system operator (ISO) to ensure nondiscriminatory open access to their combined bulk-power transmission systems.

Plans for the "Midwest ISO" should be filed at the Federal Energy Regulatory Commission (FERC) late in 1996. Members include American Electric Power Co. (AEP), Centerior Energy Corp., CINergy Corp., Detroit Edison Co., Northern Indiana Public Service Co., and Wisconsin Electric Power Co.

Court Reverses PSC on Sale of Telco Exchange

The Wyoming Supreme Court has ruled that the state Public Service Commission (PSC) acted outside of its authority when, in 1994, it directed U S WEST Communications, Inc., to sell a local telephone exchange to an unsuccessful bidder rather than to another company with whom the LEC had already contracted for the sale.

Earlier, the PSC had required upgrades in rural exchanges throughout the state, and had endorsed a plan to sell certain local exchanges to independent telephone companies in the public interest.

Retail Aggregation: A Guaranteed Right for Small Customers?

With a CTC likely to cover stranded costs,

aggregators must somehow find power cheap

enough to offer real savings.

Retail aggregation: Wherever you stand, it appears 1998 could be the year of reckoning.

By then (em say those watching the future of aggregation in the "leader" states of California, New York, Massachusetts, and New Hampshire (em rulemakings will have sorted out the issues of stranded costs, distribution, and reliability.

FERC Signals Flexibility on Open-Acces Problems

The Federal Energy Regulatory Commission (FERC) has approved a series of orders clarifying that it will not deny or revoke market-based, wholesale electric rates for utilities or their marketing affiliates without first allowing them to correct defects in their open-access transmission tariffs (Docket Nos. ER94-1045-000 et al., Feb. 14, 1996).

Utilities with existing market-based rates (or affiliates with such rates) will have 15 days to refine their open-access tariffs after the FERC identifies a problem (em only then will market-based rates be revoked.

Off Peak

As long as we're talking about "stranded costs," why not consider the "unearned gains" accrued during construction? Namely (em the allowance for funds used during construction (AFUDC) representing capitalized financing costs that built up to such high levels back in the 1970s, during the peak of the last construction cycle for baseload electric generating plants.

One can argue the policy: Did those 70's-era rules on AFUDC extract unwarranted economic rents for nuclear construction? Good or bad, those costs are sunk.

The Gas Storage Market: What Does it Tell Us?

The authors asked pipelines

and LDCs how they used storage.

Leasing activity proved a surprise.

Since deregulation, the natural gas industry has seen tremendous changes in every sector. Competitive pressures have reorganized business strategies so much that only those firms that adapt will survive. One area that stands ripe for change is the natural gas storage market.

Why build gas storage fields?

NRDC, Others, Ask FERC to Rethink Pollution

A unique force of 25 environmental and energy/utility companies have joined together and filed comments on the Federal Energy Regulatory Commission (FERC) Notice of Proposed Rulemaking on open-access electric transmission (Mega-NOPR), and the subsequent draft environmental impact statement (EIS), asking the FERC to mitigate the air-pollution impact of plans to promote wholesale electric competition and open access to utility transmission lines.

The parties urge the FERC to link its open-access policy with an environmental strategy that reduces air pollution at the g

Frontlines

Lately I'm reading up on the new Telecommunications Act. Last week I printed a copy from the Internet and stuffed it in my briefcase. Each night on the train I give it a go and skim a few sections.

The new law unabashedly favors competition over regulation, but appoints state commissions (PUCs) to certify when that competition may be deemed effective enough to open markets. Thus, the PUCs will take at least one last shot at managing markets before they relax regulation for competitive services.

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