News Digest

Fortnightly Magazine - May 15 1998

TELCO UNIVERSAL SERVICE FUND. Reversing an appeals court, the Kansas Supreme Court upheld a decision by the Kansas Corporation Commission that had required wireless telecommunications carriers to contribute to the state's universal service fund. It also affirmed a KCC ruling setting the initial amount of the fund in a roundabout way based on equalizing inter- and intrastate long-distance rates.

The KCC order (issued Dec. 27, 1996) had slashed intrastate toll rates by $111 million over three years. It then cut access charges by an equal amount to offset the loss to toll carriers. Finally, it added an equal amount to the USF to compensate local carriers for the loss of access charges. The appeals court said the ruling violated the federal Telecommunications Act (it found no rational link between toll rate cuts and the USF), but the high court disagreed, saying that federal law did not bar the state's revenue-

neutral concept. Citizens' Util. Ratepayer Bd. v. Kansas CC, Nos. 78545 et al., March 13, 1998, 1998 wl 110548 (Kan.).

PUC PROCEDURE. A Texas appeals court, upholding a state PUC order, ruled that state law allows the commission to vacate findings of fact by an administrative law judge without finding an error of law or instituting new policy. Reversing an ALJ ruling, the PUC had found that an electric utility burned too much coal and not enough natural gas for power generation. SW Pub. Serv. Co. v. Texas PUC, No. 03-97-00024-cv, Jan. 29, 1998 (Tex.App.).

ELECTRIC RATE DISCOUNTS. A Michigan Appeals Court has upheld a decision by state regulators approving a discounted electric rate contract between Consumers Power Co. and a large industrial customer without prior notice, accepting the PSC's reasoning that the utility had not sought higher rates for other customers in the same case to cover the discount. The state attorney general had argued that a hearing was required since a rate increase was still possible in the future. Attorney General v. Mich. PSC, No. 193893 Dec. 23, 1997 (Mich.App.).

Business Wire

THE GAS RESEARCH INSTITUTE published a guidebook (gri-98/0025) that can help municipal utilities analyze the technical and economic merits of distributed generation applications. The GRI guide discusses distribution system limitations and offers cost estimates of natural gas reciprocating engines, gas turbines and fuel cells. Cost estimates also are provided for large capital expenditures such as new transmission lines and substations. The guidebook can be ordered via e-mail ( or fax (630-406-5995).

Hibbing Taconite Co., a major iron ore mining complex, entered a long-term electric power supply agreement with Minnesota Power, which will continue to meet all of HIBTAC's large electric power needs through December 2008. In exchange, Minnesota Power will commit additional capital to help HIBTAC further improve the efficiency of its energy intensive operations.

Water Management Consultants is developing a two-dimensional, variably saturated flow model on behalf of the Metropolitan Domestic Water Improvement District and the Town of Oro Valley in Arizona for a large proposed in-channel artificial recharge project. The project, worth about $35 million, covers the possible recharge of about 28,000 acre-feet per