Fortnightly Magazine - September 1 1997

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.

Coalition Offers Alternative to Michigan PSC Plan

A coalition of Michigan electric utility customer groups and other entities has proposed an electric restructuring bill in lieu of the plan adopted by the Michigan Public Service Commission on June 5.

"Six months ago, many from this same group came together to point out that the commission's plan, if implemented, would be too slow, would favor the state's largest utilities and would result in few, if any, real savings for customers," said David Dornbos Sr., chair of Association of Businesses Advocating Tariff Equity.

Pipeline Customers To Get Storage Gas at Cost

The U.S. Court of Appeals for the District of Columbia Circuit has upheld a ruling by the Federal Energy Regulatory Commission requiring an interstate pipeline company to sell excess low-cost storage gas supplies to its sales customers at cost, on the theory that ratepayers who bear risk for losses in industry restructuring should retain gains from the same process.

The pipeline, Williston Basin Interstate Pipeline Co., had found that excess gas was available after it had cut sales operations as part of the market restructuring ordered by the FERC.

Utility Files Suit Against Whistleblower Law

Northeast Utilities has filed suit asking the Federal District Court in Hartford to declare unconstitutional a new state whistleblower law, which became effective May 27.

The utility said that while it agrees with the intent of Public Act No. 97-60, the law violates the constitutional rights of employers. The law would prevent utilities and related businesses from retaliating against an employee that goes public about alleged wrongdoing by a company. Northeast Utilities believes it denies employers a reasonable time to investigate and respond to employee complaints.

Pa. Court Defines Need for Transmission Lines

Overturning a utility commission ruling, the Pennsylvania Commonwealth Court has concluded that state law does not require an electric utility to prove that a planned transmission facility is needed from an engineering perspective to win a certificate of convenience authorizing construction.

The court overturned a ruling by the Pennsylvania Public Utility Commission that had denied an application by Pennsylvania Power and Light Co. to construct a 69-kilovolt transmission line.

Pricing Transmission Constraints

Your editorial in the June 1, 1997 issue ("PJM's Brave New World," p. 4) provided a perceptive analysis of the Pennsylvania transmission pricing debate. As you point out, standard economics defines the value of a transmission constraint as the difference between the price of electricity on one side of the constraint and price on the other side. There can be no dispute over this statement; however, this straightforward theory is not always correctly applied.

In the case of electricity, the marginal running cost (or energy price) cannot be used to determine the value of a constraint.

Ratepayers Win Compensation as Oregon OKs Enron/PG&E Merger

Regulated customers of Portland General Electric Co. will receive compensation both for lost profits and for future, anticipated efficiencies under the final decision issued by the Oregon Public Utility Commission that approved the merger between PGE and Enron Corp.

Under the approved merger plan, Enron will absorb the utility's corporate parent, Portland General Corp.

As a result of negotiations between the merging companies and the commission's staff, Enron has agreed to guarantee "monetary compensation and benefits" to Oregon ratepayers in the amount of $141 million.