News Digest

<b>State PUCs</b>
State PUCs
Fortnightly Magazine - April 15 2000
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State PUCs

Natural Gas Competition . After reviewing a report prepared by its staff, the Iowa board rejected all plans filed by Iowa natural gas utilities to open the natural gas market to small-volume customers.

"[S]ome of the utilities' plans do not proceed quickly enough and others proceed too quickly by having the regulated utility exit the merchant function," the board said.

The board, while recognizing that some issues might require legislation to resolve, attempted to "move this process forward" by requiring each utility to propose tariff changes that remove barriers to competition in the small-volume sector. Comments addressing the procedural steps for designing the initial tariffs were due April 3.

Board member Susan J. Frye agreed with the rejection of the utilities' plans, but dissented on the commission's attempt at moving forward on the issue without the help of lawmakers. "[L]egislation is a better way to open the small-volume gas market to customer choice than the interim tariff modification approach adopted in this order," she said. .

Demand-side Management. The Kentucky PSC approved a three-year extension of pilot programs for demand-side management administered by Kentucky Power Co., but has encouraged the utility to seek ways to improve the cost-effectiveness of weatherization programs designed to assist its low-income customers. .

Administrative Rules . Interested parties must notify the Iowa board by May 1 if they wish to participate in a comprehensive review of commission rules, as ordered by Gov. Vilsack for all state agencies. However, the board acknowledged that if an electric restructuring bill passes, the review plan would have to be completely revised because restructuring rulemakings may have to be combined with the review. A final report is to be submitted to the governor's office on Dec. 31, 2002. .

PG&E Rates. In a highly contentious rate case, producing a decision longer than 500 pages, the California PUC on Feb.17 granted Pacific Gas & Electric Co. a 13 percent increase ($91 million) in revenues for natural gas distribution service (PG&E had asked for $377 million), plus an 18.9 percent increase ($361 million) in revenues for electric distribution service (versus a $648 million request).

The net impact on electric revenues will be smaller, however (up only $120 million net) because the increase will be offset by the expiration of $241 million in legislatively mandated electric revenues for reliability related activities.

Furthermore, consumer electric rates are not immediately affected by the authorized increases because of the general rate freeze mandated by state law and the 10 percent mandated rate cut for residential and small commercial customers currently in effect under Assembly Bill 1890. On the gas side, the PUC estimated that residential bills would rise $1.56 for a customer using an average of 50 therms per month.

The ruling reflects the authorized cost of capital for 1999 set in Decision 99-06-057, issued last June. .

Rights-of-Way. The Maine PUC OK'd a plan by Central Maine Power Co., an electric utility, to transfer right-of-way easements to, and to share electric corridors with, affiliated natural gas pipeline company, CMP Natural Gas LLC. The arrangement will