Fortnightly Magazine - September 1 1996

Virginia Investigates Holding Company Dispute

The Virginia State Corporation Commission (SCC) has directed Virginia Electric and Power Co., a subsidiary of Dominion Resources, Inc., to adopt conflict-of-interest standards to govern board of director membership. The SCC also directed the utility to file an annual independent audit of its affiliate transactions and to cooperate with commission staff in determining whether "Virginia Power is paying for duplicative executive services" from its holding company parent. The action grows out of an SCC investigation into a 1994 public dispute between the utility and Dominion Resources.

Firm-to-the-Wellhead Rates Make Comeback

Harkening back to the pre-Order 636 era, the Federal Energy Regulatory Commission (FERC) has issued two orders approving firm-to-the-wellhead rates for Transcontinental Gas Pipe Line Corp. (Docket Nos. RP92-137-016 and RP93-136-000) and Tennessee Gas Pipeline Co. (Docket Nos. RP91-203-000 and RP92-132-000).

In initial decisions, one administrative law judge had approved firm-to-the-wellhead rates in the Tennessee case; another had deemed them anticompetitive in the Transco case.

Ohio Orders Open-access Gas Service

While approving a proposal by Marbel Energy Corp., owner of an independent gas and oil production business, to acquire Northeast Ohio Natural Gas Corp., a natural gas local distribution company (LDC), and Ohio Intrastate Gas transmission Co., an intrastate gas pipeline, the Ohio Public Utilities Commission (PUC) has directed both the LDC and the pipeline to offer nondiscriminatory open access to all of their service offerings. The PUC explained that the open-access condition would further competition in the state's natural gas industry.

ESCos, Round Two: Fighting for Market Share

How much will utilities invest

in energy service companies to boost earnings beyond the normal growth rate?Going on the "defensive-offensive."

In the early 1990s, flush with utility money from its corporate parent, Entergy Systems and Service, Inc. began expanding to provide competitive energy services.

FERC Sets Merger Hearings

The Federal Energy Regulatory Commission (FERC) has set for hearing the proposed merger of Public Service Co. of Colorado (PSCC) with Southwestern Public Service Co. (SPS), directing that an initial decision be issued by January 31, 1997 (Docket No. EC96-2-000).

What to do with All that Cash?

What to Do With All that CASH?Seeing no need to build, utility managers are looking

to invest. Can they be trusted

with stockholder money?With little of the fanfare that surrounds the debate on utility competition, robust cash flows and declining capital outlays have created forces that will reshape the industry no matter how competitive restructuring unfolds. Cash generation already exceeds investment in core utility activities, and the differential will grow sharply over the next several years.

FERC Rejects "Secret" Negotiated Rates

The Federal Energy Regulatory Commission (FERC) has rejected a request by NorAm Gas Transmission Co. for confidential treatment of its negotiated rates, saying that it would no longer accept for processing any rate sheets marked "confidential" or "privileged" (Docket Nos. RP96-200-002 and RP96-200-003). But Commissioner James J. Hoecker did note that rate disclosure could result in competitive harm, something the FERC should investigate in the future. t

Lori A. Burkhart is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

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LDC Must Offer Contiguous Billing, Absorb Special Discounts

The Michigan Public Service Commission (PSC) has reaffirmed an earlier decision requiring Consumers Power Co., a natural gas local distribution company (LDC), to absorb revenue losses associated with special discounts granted to large transportation customers under contracts and tariffs approved by the PSC. While directing the LDC to reduce base gas rates by $11.73 million, the PSC ruled that Consumers had failed to prove that the discounts were justified by cost of service or that the load-retention aspects of the discounts conferred a general benefit on ratepayers.

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