Sound bites from state and federal regulators.
Build vs. Buy. Finding the "build" option as the cheapest alternative when two purchased power contracts expired, Florida PSC allows Tallahassee municipal electric utility to construct a 250-megawatt, combined-cycle, natural gas-fired power plant at an existing generation site. Docket No. 961512-EM, Order No. PSC-97-0659-FOF-EM, June 9, 1997 (Fla.P.S.C.).
Special Contract Discounts. New Jersey allows Elizabethtown Gas Co. to offer special contract discounts for firm gas transportation to two large industrial customers who allegedly were considering bypass options. Docket No. GM96090656, June 24, 1997 (N.J.B.P.U.).
QF Buyout Costs. To balance "ratepayer neutrality" with shareholder risk in terminating a purchased power contract with a qualifying cogeneration facility, the Florida PSC will allow Florida Power Corp. to recover plant operating costs through its fuel adjustment clause, but recover the $445-million buyout cost through its capacity cost recovery clause in less than five years. Docket No. 970096-EQ, Order No. PSC-97-0652-S-EQ, June 9, 1997 (Fla.P.S.C.).
Water Utility Returns. Florida recalculates rates of return on equity for water and wastewater utilities for first time since 1995. New rates range from 9.21 percent to 10.46 percent, dropping the midpoint by 120 basis points, compared with prior returns. Order also caps ROE at 10.46 percent for utilities with equity ratios of less than 40 percent, to "discourage imprudent financial risk." Order No. PSC-97-0660-FOF-WS, June 10, 1997 (Fla.P.S.C.).