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Fortnightly Magazine - July 15 1997

Whither FERC?

Bruce W. Radford, and Lori A. Burkhart

With electric bills in Congress, and Moler bound for DOE, the Commission needs new vision.

Speaking in May at an informal press luncheon at the Washington International Energy Group in Washington, D.C., FERC Commissioner William L. Massey described the Federal Energy Regulatory Commission's role in an open-access electric industry as "nourishing" competition.

South Dakota Court Settles Boundary Dispute

Phillip S. Cross

South Dakota Supreme Court has ruled that state regulators erred in authorizing an electric utility to serve an established industrial customer of an electric cooperative.

The commission had found that the Northwestern Public Service Co. could replace Northern Electric Cooperative as the electric supplier for Hub City Inc. Hub had purchased an industrial property containing manufacturing facilities served by the utility and a plant addition served by the co-op.

Illinois Oks Three-Way Interstate Merger

Lori A. Burkhart

The Illinois Commerce Commission has approved the three-way merger of WPL Holdings, IES Industries, and Interstate Power Co. to form Interstate Energy Corp.

The commission agreed that the public will benefit from the cost savings produced by the merger. The companies predict savings of about $750 million for the first 10 years after the merger. The Minnesota Public Utilities Commission granted merger approval on March 24. The Federal Energy Regulatory Commission concluded hearings in May and had yet to rule at press time.

Minnesota Approves "Interstate" Merger

Phillip S. Cross

The Minnesota Public Utilities Commission has approved the merger of Interstate Power Co., IES Industries Inc., and WPL Holdings Inc., joining Illinois, which has also signed off on the deal. (See, Headlines, this issue, p. 21.)

The commission estimated total merger-related savings of $592.1 million to $648.1 million over 10 years. Minnesota ratepayers could save nearly $15.5 million in electric costs and $6.4 million in gas over the same period.

N.Y. Proposes ESCO Rules, Tables Enron Plan

Lori A. Burkhart

Finding it "too early" to consider proposals by Enron and Wheeled Electric Power to assign the state's electric utility customers to retail competitive energy service companies, the New York Public Service Commission nevertheless has mapped out a proposal to introduce competition in retail energy markets through a state-established retail provider of last resort.

The commission also would like to make information readily available to allow consumers to make informed choices. The proposed policy would permit adequate oversight of the market to ensure its fair operation (Opinion No.

QF Antitrust Complaint Dismissed

Phillip S. Cross

The U.S. Court of Appeals for the Third Circuit has ruled that federal antitrust laws provide no remedy for complaints by a qualifying cogeneration facility that an electric utility was impermissibly curtailing purchases under its power purchase contract with the QF.

It said that Pennsylvania's recently enacted electric restructuring law "comes too late" to make the QF's complaint a valid one.

Schuylkill Energy Resources Inc., owner and operator of an anthracite coal refuse-fired QF in Shenandoah, Pa., had filed an antitrust claim against Pennsylvania Power and Light Co.

Massachusetts Utilities File Electric Choice Plan

Lori A.Burkhart

Eastern Edison Co. and Montaup Electric Co., both subsidiaries of Eastern Utilities Associates, have each filed an agreement with the Massachusetts Department of Public Utilities to introduce electric industry competition.

The target date for introduction of competition is Jan. 1, 1998, when Eastern Edison customers would experience a 10-percent rate cut or could choose an alternate electric supplier. Retail rates would be frozen until Dec. 31, 2000. But customers staying with the utility would be offered a price starting at 2.8 cents per kilowatt-hour.

Georgia Prepares for Retail Gas Competition

Phillip S. Cross

Under a new law deregulating the state's natural gas market, the Georgia Public Service Commission must enact regulations by Dec. 31, 1997, governing the certification of gas marketers and associated service quality standards and customer complaint procedures.

Peggy Welsh Winds Up: NARUC's New Exec Wants PUCs to Network with Congress Joseph F. Schuler Jr.

Joseph F. Schuler, Jr.

"When they come to town ... we'll ... accompany them to Capitol Hill ... to make their trip to Washington a 'two-fer,' if you will."

Paul Rodgers knocked NARUC on its ear last July when he announced his resignation as executive of that century-old association.

Rodgers, also general counsel, had served the National Association of Regulatory Utility Commissioners for more than 30 years.

His unexpected move came in the midst of strategic planning at NARUC.

Foreign Investment: Moody's Doubts Bondholder Benefits

Lori A. Burkhart

A new report from Moody's Investors Service finds that foreign investments often offer U.S. electric utility shareholders the prospect of higher returns, but hold little immediate upside benefits for bondholders.

The report, Some Investments Riskier Than Others in Wave of Overseas Expansion by U.S. Electric Utilities, finds that for bondholders, such investments detract from alternative uses of free cash flow. The bondholder could apply the invested money to debt service or repayment, or growing retained earnings to offset potential write-offs of stranded investment.