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Fortnightly Magazine - February 15 1997

Mass Ok's Price Cap for Gas LDC, Questions Revenues

The Massachusetts Department of Public Utilities has authorized the Boston Gas Co. to implement a performance-based rate plan that will include a price cap for monopoly services, using the "GDP-PI" measure of inflation, minus a productivity offset of 2 percent.

It also told Boston Gas to cut rates by $2.897 million but allowed the company to go forward on an interim basis with an plan to unbundle services and require customers or marketers to take manadatory assignment of a pro rata share of the company's upstream pipeline and storage capacity contracts.

Byline: 
Phillip S. Cross
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PECO Energy Buys Power Plant

In a unique agreement with two of its largest industrial customers, PECO Energy Co. has purchased USX Corp.'s Fairless Works power plant in Bucks County, Pa. The plant will burn landfill gas purchased from Waste Management Inc., which owns two nearby landfills.

The Fairless Works site hosts the sheet- and tin-finishing operations of the U.S. Steel Group of USX Corp., along with several other industrial plants. PECO now will own the USX power house with two steam turbine generators, which produce up to 60 MW of electricity and 200,000 pounds of steam per hour.

Byline: 
Lori A. Burkhart
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Enron Joins With California Agency

The 700,000-customer Northern California Power Agency and Enron Capital & Trade Resources, an Enron Corp. subsidiary, have formed an exclusive strategic alliance to offer improved energy services while allowing NCPA to compete in a deregulated electric market.

Upon reaching a final agreement, Enron will provide the agency with a comprehensive package of services, including sale of natural gas and financial and risk management products.

Byline: 
Lori A. Burkhart
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AEP And Sprint Join On Fiber Optics

AEP Communications Inc., the new telecommunications arm of American Electric Power Inc., has agreed with Sprint Communications Inc. to jointly construct a 150-mile fiber-optic line between Charleston, W. Va., and Roanoke, Va.

AEP and Sprint will share the expenses of building the fiber-optic line. The new line will allow AEP to provide its parent company with network upgrades, while Sprint will add alternate routing and additional capacity between the two cities. Construction begins this spring. (em LB

Byline: 
Lori A. Burkhart
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N.J. Municipal Water System Acquired

New Jersey-American Water Co., the largest water utility in New Jersey, has acquired the Howell Township Municipal Water System for $35.1 million, in what NJAW believes to be the largest private acquisition of a municipal water system in the U.S.

NJAW President Daniel L. Kelleher noted that Howell Township residents would experience an immediate 5-percent water rate cut, and rate stability.

Transfer of utility ownership also benefits municipalities, Kelleher says, by turning hidden equity into capital to use for community needs.

Byline: 
Lori A. Burkhart
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Pennsylvania Finalizes Regs for Small Water Utilities

With doubts resolved over its legal authority, the Pennsylvania Public Utility Commission has issued "final-form" rules (but subject to legislative review) that allow an "operating-ratio" method as an alternate form of rate regulation for small water and wastewater utilities, many of which now face severe financial difficulties.

For added financial aid, the new rules also allow water utilities to create an emergency maintenance and operation fund as well as a reserve account, with both funded as "customer contributions in aid of construction."

Revenues Eaten Up.

Byline: 
Phillip S. Cross
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Electric Acquires Water Utility

NIPSCO has agreed

to acquire IWC Resources Corp., the parent of Indianapolis Water Co., for $288 million, prompting a look at credit ratings.

In response to the agreement, Moody's Investors Service is considering a ratings downgrade of IWC ('A1' senior secured). Moody's also confirmed the ratings of NIPSCO Industries, Inc. ('baa3' preferred stock) and its operating subsidiary, Northern Indiana Public Service Co. ('A2' senior secured).

Byline: 
Lori A. Burkhart
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