Fortnightly Magazine - October 15 1996

NiMo Seeks to Buy Out IPP Contracts

Niagara Mohawk Power Corp. (NiMo) has offered to terminate 44 contracts, constituting 90 percent of electricity bought from independent power producers (IPPs), in exchange for a combination of cash and securities.

NiMo claimed the move would allow implementation of its PowerChoice proposal, which would permit customers to choose their electric supplier. The plan calls for NiMo to create a separate, nonnuclear generating company. Although details remain confidential, NiMo chairman and CEO William E.

Indiana Launches LEC Competition

The Indiana Utility Regulatory Commission (URC) has opened the state's local telephone market to competition by ordering local exchange carriers (LECs) to offer "bundled resale" of retail local exchange and related services.

The ruling applies to the state's two major LECs, Ameritech and GTE North, as well as to other smaller companies subject to the provisions of the federal Telecommunications Act of 1996 (Act).

Amended Cajun Plan Lowers Rates

Ralph R. Mabey, trustee in the Chapter 11 bankruptcy proceedings of Cajun Electric Power Co-op., has entered into an amended asset-purchase agreement with Louisiana Generating LLC for the purchase of Cajun's nonnuclear assets. Louisiana Generating LLC is the joint-venture affiliate of NRG Energy, Inc. and Zeigler Coal Holding Co.

The NRG/Zeigler bid was selected in April, but on July 15, the bankruptcy court rejected the plan's buyer-protection provisions.

Telco Business Services Ruled Noncompetitive

An Illinois appeals court has upheld a ruling by the Illinois Commerce Commission (ICC) that certain services offered to business customers by Illinois Bell Telephone Co. are noncompetitive.

The local exchange carrier (LEC) had reclassified the services (distance-sensitive calls, credit card calls, and operator assistance) as competitive to take advantage of pricing flexibility permitted under the ICC's regulatory reforms for the industry.

Telephone Rate Plans Said to Frustrate Competition

The Office of the Ohio Consumers' Counsel has gone on record at the Ohio Public Utilities Commission (PUC) as opposing any application by Cincinnati Bell Telephone Co. to amend its present alternative regulation plan to set rates using a price cap tied to the consumer price index, and to deaverage rates.

The Consumers' Counsel claims that the amendment must be considered as a new plan due to the substantive changes it proposes. It adds that, if enacted, the changes would impose rate hikes and discourage consumer choice for local calling.

Oregon Unbundles LEC Rates

The Oregon Public Utility Commission (PUC) has unbundled services offered by the state's major local exchange carriers (LECs) into a series of network building blocks, pricing the new service offerings in conformance with policies adopted in earlier cases. The ruling retains statewide average rates for local exchange service across all density and distance categories.

The PUC also required the LECs, U S WEST Communications, Inc. and GTE Northwest, Inc., to impute the price they charge to other carriers for basic network functions when setting their own prices.


In August, the Federal Communications Commission (FCC) issued rules to show how new competitors can enter the local markets for telecommunications (em forever relegating local telephone monopolies to that switchboard in the sky.

Marketing & Competing

There's more to meeting marketing challenges than first meets the eye.

Imagine you've just taken over as chief executive officer (CEO) of a $1-billion gas utility in a major metropolitan market.

LEC's Anti-slamming Program Draws Fire

The Michigan Public Service Commission (PSC) has directed Ameritech Michigan, a telecommunications local exchange carrier (LEC) to discontinue its advertising campaign for a special program billed as a protection against "slamming" (em i.e., switching a customer's long-distance service without their knowledge or consent.