Fortnightly Magazine - February 15 1996

Wisc. Adopts Code of Conduct for LDC Marketing Affiliates

The Wisconsin Public Service Commission (PSC) has approved an affiliated interest agreement between Madison Gas & Electric Co., a natural gas local distribution company (LDC), and its subsidiary Great Lakes Energy Corp., an energy marketer, to reflect changing conditions in the retail market for natural gas. The approved agreement separates all gas procurement and sales functions, including physical separation of employees of both companies.

Byline: 
Phillip S. Cross
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A.G.A. Supports PUHCA Repeal

The board of directors of the American Gas Association (A.G.A.) has adopted a resolution asking Congress to repeal the Public Utility Holding Company Act (PUHCA) and establishing PUHCA repeal as a high priority. A.G.A. says it will actively lobby Congress and the Clinton Administration for repeal. The association seeks to continue the tangible consumer benefits of deregulation and increased competition in the natural gas industry. The A.G.A.

Byline: 
Lori A. Burkhart
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FERC Alters Affiliat Power Marketing Policy

The Federal Energy Regulatory Commission (FERC) has revised its policy on potential abuses by affiliated power marketers, lifting restrictions on marketing transactions involving affiliates that do not have captive customers. The changes stem from a case involving USGen Power Services, L.P., an affiliate of Pacific Gas & Electric Co. (PG&E) that sought to market power to and from affiliated and nonaffiliated entities, including exempt wholesale generators (EWGs) and power marketers, but not to PG&E (Docket No.

Byline: 
Lori A. Burkhart
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FERC Wants Transmission Info on the Net

The Federal Energy Regulatory Commission (FERC) has released proposed rules for real-time information networks and standards of conduct, a "critical" supplement to its electric transmission open-access NOPR (Docket No. RM95-9-000). The FERC wants all utilities to set up information networks that give wholesale sellers and purchasers of electricity equal access to information concerning availability and prices.

Byline: 
Lori A. Burkhart
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Depreciation Reserve Soaks Up Stranded Investment

Save a Nickel, Save a Dime

Is One Merger as Good as Another?

In late November, the Federal Energy Regulatory Commission (FERC) put off immediate approval of the proposed merger between The Washington Water Power Co. and Sierra Pacific Resources (to form "Altus"), and set the case for hearing. The reason? The FERC doubted whether the merger would achieve operational efficiencies between the two noncontiguous utilities.

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Washington Adopts Restructuring Principles

The Washington Utilities and Transportation Commission (UTC) has issued a policy statement of eight principles as a guide to adapting its regulatory authority to the "more competitive circumstances facing the state's electric industry." The statement is not binding on the UTC or on parties to formal proceedings.

The UTC said it would strive to promote the "natural" evolution of efficient markets, but that its primary goals would remain affordable prices for electric service, protecting the long-term integrity of the system, and preventing noneconomic bypass and attendant

Byline: 
Phillip S. Cross
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California Set ROE for 1996

Energy utilities in California will be permitted to set charges at a level high enough to earn an 11.6-percent return on equity (ROE) for 1996. Pacific Gas and Electric Co. was also awarded a separate 50-basis-point risk premium (12.01 percent) for the 70/30 debt/equity ratio associated with its natural gas pipeline expansion project.

The award reduces the ROE for all of the state's utilities except Sierra Pacific Power Co., which operated under an ROE allowance of 11.3 percent last year. Both Southwest Gas Corp.

Byline: 
Phillip S. Cross
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Price Caps and Competition Conspire Against DSM

Changing market conditions and newly instituted price-cap regulation give electric utilities a greater disincentive for demand-side management (DSM), according to the Maine Public Utilities Commission (PUC). While approving a 1996 DSM savings target of 36 million kilowatt-hours (Kwh) for Central Maine Power Co. under the utility's new price-cap plan (see Re Central Maine Power Co., 159 PUR4th 209 (Me.P.U.C.

Byline: 
Phillip S. Cross
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Arkansas Approves IntraLATA Competition

The Arkansas Public Service Commission (PSC) has approved a move to full competition in the telecommunication intraLATA toll market. The PSC has concluded that its earlier concerns regarding uneconomic duplication of facilities and erosion of revenues for the state's local exchange carriers (LECs) no longer justified keeping the market closed. According to the PSC, competition among interexchange carriers (IXCs) for interLATA traffic had benefited consumers by producing over 100 certificated carriers competing in price and packaging of services.

Byline: 
Phillip S. Cross
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Maryland Still Short on Telephone Numbers

Despite a 1992 decision to add a new area code to prevent the projected exhaustion of telephone numbers, the Maryland Public Service Commission (PSC) has approved a plan to provide additional numbering capacity within exchanges by requiring 10-digit dialing for all customers. Future telephone lines would be assigned a new area code under the approved plan, but no existing customers would be required to change their current telephone numbers.

Byline: 
Phillip S. Cross
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