Fortnightly Magazine - September 1 1997

New Jersey Kills Gross Receipts Taxes

The New Jersey Legislature has passed a utility tax reform package eliminating the gross receipts and franchise tax for electric, natural gas and telephone utilities.

The new tax system will levy a 6-percent tax on electric and gas sales, a 9-percent tax on companies selling the electric and gas and a transitional tax to be phased-out after five years. The package guarantees that municipalities will receive $745 million in aid in 1998 to make up for the lost revenues. That annual amount will climb to $755 million in 2002.

Institute Takes Aim at Subsidies

A report from the Northeast-Midwest Institute has found that the Tennessee Valley Authority, Bonneville Power Administration, and the three other power marketing administrations must relinquish their preferential treatment and subsidies if consumers are to enjoy the rewards of electric competition.

Federal Power Dinosaurs - Reforming TVA and PMAs in a Competitive Electricity Environment said that as electric industry competition is introduced, lawmakers cannot ignore public or government-owned power companies.

Nevada Gov. Signs Restructuring Bill

Nevada Gov. Bob Miller (D) on July 17 signed into law an electric restructuring bill to bring competition to the state starting July 9, 1999.

AB 366 will split the state's utility commission into a three-member Nevada Public Utilities Commission and a three-member Transportation Service Authority. The commission would employ a rulemaking proceeding to unbundle rates, design consumer safeguards and set parameters for stranded costs.

FERC Approves NEPOOL Restructuring

The Federal Energy Regulatory Commission on June 25 conditionally approved the restructuring of the New England Power Pool into an independent system operator, even though many of the details remain under negotiation.

The FERC also approved on an interim basis the transfer of control of NEPOOL public utility members' transmission facilities to the ISO on July 1 (Docket No. EC97-35-000).

To insure NEPOOL's independence, the FERC changed NEPOOL's definition of "affiliate," a relationship indicating 50-percent ownership, to one indicating 10-percent ownership.

Boston Edison, Central Maine Invite Bids for Plants

Central Maine Power Co. has sent requests for proposals to all parties expressing an interest in purchasing the utility's generation assets, as provided for by recently enacted state legislation.

Also, Boston Edison Co. has unveiled its proposal for divesting its gas- and oil-fueled generating plants, and has submitted its divestiture plan to the Massachusetts Department of Public Utilities. The plan reflects a settlement among the utility, Massachusetts Attorney General Scott Harshbarger and the Massachusetts Division of Energy Resources.

Interest in Hydro.

Hoecker Takes FERC Helm, Makes Assignments

At his first meeting as chair of the Federal Energy Regulatory Commission, James Hoecker announced that he was assigning responsibility for certain important issues to FERC members.

At the June 25 meeting, Hoecker assigned the key responsibility for reliability issues to Commissioner Vicky Bailey. Bailey will track reliability developments at NERC, DOE and around the nation. Hoecker assigned responsibility for merger policy issues to Commissioner William Massey. Commissioner Donald Santa Jr. and General Counsel Susan Tomasky were assigned the oversight of FERC's complaint procedures.

Orange & Rockland Restructuring Needs PSC Help

Orange and Rockland Utilities has expressed "extreme disappointment" with a preliminary decision issued by a judge at the New York Public Service Commission that concerns O&R's proposed electric restructuring settlement. (See, Case 96-E-0900, Opinion No. 96-12.)

On July 2, Administrative Law Judge Stewart C. Boschwitz ruled that unwillingness by O&R to divest its generation company would create potential anti-competitive situations and could hurt ratepayers.

NRC Watch List Sits at 13

The Nuclear Regulatory Commission staff has identified 13 nuclear plants that warrant increased NRC regulatory attention. These plants will remain on the NRC "watch list."

No additional nuclear plants were added to the NRC watch list. But one plant - Indian Point 3, operated by the New York Power Authority - was removed from the list. Indian Point 3 had been placed on the list in June 1993, and now has been removed due to improved performance.

Despite Mandate, Phone Competition Still on Hold

Nearly a year and a half after passage of the federal Telecommunications Act of 1996, real competition has yet to emerge in Indiana in local telephone markets, according to a report issued by the Indiana Regulatory Commission.

Nevertheless, the U.R.C. says it anticipates making competitive choices available to local consumers in the coming months.

In Brief...

Sound bites from state and federal regulators.

Refusal to Wheel. Federal judge allows rural electric co-op to proceed with antitrust suit against PacifiCorp, ruling that doctrine of state action immunity does not insulate a regulated investor-owned electric utility from antitrust action for allegedly refusing to sell to sell power to others for resale to customers, or for allegedly refusing to wheel power generated by other suppliers.