Fortnightly Magazine - September 15 1996
The U.S. Court of Appeals for the District of Columbia Circuit on July 16 upheld Order 636, which required unbundling of natural gas pipeline sales and transportation services, but remanded at least six issues to the Federal Energy Regulatory Commission (FERC) for further explanation (United Distr. Cos. v. FERC, No. 92-1485, July 16, 1996).
The old shibboleth to some extent is literally true. The electric industry appears different from the natural gas industry in that demand must be matched immediately with production. No viable location comes to mind to put away some of that extra power until it is needed. But literal truth is not necessarily the whole story.
Nine of the 10 electric utility members (excluding PECO Energy Co.) of the Pennsylvania-New Jersey-Maryland (PJM) Interconnection have filed agreements and transmission tariffs at the FERC, seeking to replace the pool with a competitive power pool that would set a next-hour spot wholesale power price (to vary by location), but also allow bilateral trading.
The majority proposal would set up an independent system operator (ISO). The tariff would support poolwide open access and comparable transmission service.
On January 1, 1998, California will "deregulate" the state's electric utilities. The Western Power Exchange (WEPEX) and the independent system operator (ISO) will start up, creating an open market for wholesale power.
Sound bites from state and federal regulators.
DSM: Gas vs. Electric. Plan is approved for City of Tallahassee municipal electric and gas utility to use demand-side management to cut electric demand and use (predominantely during winter peak) through low-interest loans for natural gas equipment, even though plan will not pass RIM (rate impact measure) test. Docket Nos. 930559 et al. Order No. PSC-96-0716-FOF-EG, May 28, 1996 (Fla.P.S.C.).
Vera B. Claussen has been elected the first female president in the American Public Power Association's 56-year history. Claussen is commissioner of Public Utility District Number Two of Grant County in Euphrata, WA. Other new APPA officers include president-elect Thaine J. Michie, g.m., Platte River Power Authority, Fort Collins, CO; and vice president Walter R. McGrath, g.m., Braintree, MA, Electric Light Department.
The United States Energy Association has three new officers: P.J.
In two recent natural gas rate cases, regulators have split over the question of alleged rate subsidies in favor of residential customers.
In the first, the Rhode Island Public Utilities Commission (PUC) approved a proposal by Providence Gas Corp., a natural gas local distribution company (LDC), to redesign its rates to remedy "the ongoing subsidization of the residential class by commercial and industrial customers."
In Minnesota, however, the state PUC rejected a similar plan by Minnegasco to use an embedded-cost allocation method to shift the revenue bu
ADFITs: Not a Phantom
In his article, "Phantom Taxes: The Big Payback" (Courts and Commissions, 7/1/96, p. 41), David Wise argues that utility recovery of stranded facility costs should be reduced by the balance of accumulated deferred income taxes (ADFIT) attributable to stranded costs.
The North Carolina Utilities Commission (NCUC) has upheld an earlier ruling (issued May 2) that required interexchange carriers (IXCs), on a dollar-for-dollar basis, to reduce rates for basic intrastate message telephone service (MTS) so as to flow through to MTS customers certain reductions in local telephone access charges.
It denied requests by the IXCs to share the rate reductions with all switched-access customers, rather than target the rate cuts to basic toll services only.