STRANDED COST RECOVERY. The Pennsylvania Public Utility Commission allowed Pennsylvania Power & Light Co. to recover $2.9 billion of a requested $4.5 billion in stranded costs, cutting a higher $4-billion allowance proposed earlier by an administrative law judge. The utility petitioned for reconsideration on June 26, after CEO William F. Hecht had called the decision "unacceptable," and noting that the PUC's written order, received June 15, appeared "even more injurious" to the company that the PUC's June 4 bench order. Among other points, the petition targets a PUC action that cut transition costs to reflect a decrease in depreciation expenses for nuclear assets. Docket No. R-00973954, June 4, 1998 (Pa.P.U.C.).
ELECTRIC RATE CASES. On June 8 Virginia Power reached an agreement that, if approved by the Virginia Corporation Commission, would save customers about $920 million through several rate cuts through 2002. A final decision was expected by Aug. 1. The company would write off $220 million of regulatory assets in 1998, but against that amount it would offset any earnings surplus above an equity return benchmark (30-year treasury bonds plus 450 basis points). Any further surplus would be allocated one-third to shareholders, and two-thirds to additional accelerated amortization of regulatory assets.
ELECTRIC PRICE-CAP PLAN. The Oregon Public Utility Commission OK'd a price cap plan for Pacific Power and Light Co. -- for the distribution function only -- that will cap rates using an index based on the forecasted change in the gross domestic product price index, with an offset for productivity of 0.3 percent. A balancing account will distribute any revenue surplus or shortfall by measuring actual temperature-adjusted sales against the revenue cap.