Fortnightly Magazine - March 1 1995

Utilities Volunteer to Clear the Air

Thirteen of the nation's largest public utilities signed agreements with the Department of Energy (DOE), committing themselves to reduce greenhouse gas emissions by a combined total of 2.5 million metric tons by 2000. Last year, over 800 utilities pledged to cooperate with the Clinton Administration's goal of reducing U.S. greenhouse gas emissions to 1990 levels by 2000 in all industrial sectors.

N.J. Approves LDC Price Hedging Plan

While permitting New Jersey Natural Gas Co., a natural gas local distribution company (LDC), to continue adjustment-clause recovery of its pipeline transition costs, the New Jersey Board of Public Utilities (BPU) has approved a "financial risk-management pilot program" designed to protect the LDC from extreme supply price volatility. According to the BPU, the program will reduce supply costs by "locking in" alternative gas-supply prices using natural gas options traded on the New York Mercantile Exchange.

Point Beach Gets Dry Storage Capacity

After years of review, the Wisconsin Public Service Commission (PSC) has approved a Wisconsin Electric Power Co. plan to provide additional dry storage capacity for spent fuel at the Point Beach nuclear plant. Without it, the plant would be forced to close by 1998, the company said. Point Beach, located on the shore of Lake Michigan in Manitowoc County, consists of two 500-megawatt reactors that produce a sixth of the state's electricity. The Nuclear Regulatory Commission spent four years reviewing the plan before approving the modular system of steel and reinforced concrete.

Ohio Approves LDC Transition Cost Plan

The Ohio Public Utilities Commission (PUC) has approved a settlement agreement governing how National Gas & Oil Corp. will recover all pipeline transition cost charges from its customers. National, a natural gas local distribution company (LDC), will recover supply restructuring charges through both the sales tariff transition cost account (79 percent) and the transportation transition cost account (21 percent). It will recover gas cost charges from sales customers through its gas cost recovery mechanism. Re National Gas & Oil Corp. Case No. 94-1549-GA-UNC, Dec.

Court Upholds Storage Cask Licensing

A federal appeals court in Cincinnati has ruled that the Nuclear Regulatory Commission (NRC) acted properly in licensing the use of ventilated, dry storage casks for spent nuclear fuel at Consumer Power Co.'s Palisades nuclear plant. Despite challenges from public interest groups and the attorney general of Michigan, the court found adequate input from the public in the NRC licensing process, which is used for all reactor sites nationwide. Michael G.

Alternative Regulation Plan Loweers Rates for LEC

The Tennessee Public Service Commission (PSC) has finalized an $8.7-million rate reduction for United Telephone-Southeast, Inc. under an alternative regulation plan in place since 1991. The rate reduction is the first under the plan's three-year earnings review procedures.

Gas on the Rise in 1995

The American Gas Association

(A.G.A.) forecasts a 3.4-percent increase in natural gas use for 1995, to 22.5 quadrillion British thermal units (quads) from 21.7 quads in 1994. "Such an increase would continue an eight-year trend that has seen natural gas consumption rise nearly 30 percent since 1986," Michael Baly, A.G.A. president, noted in a presentation to New York securities analysts.

Ohio Modifies LDC Curtailment Regulations

The Ohio Public Utilities Commission (PUC) has modified its natural gas transportation guidelines for local distribution companies (LDCs) to reflect changes in the industry under FERC Order 636. The PUC said its revisions would give customers a clearer understanding of service rights and curtailment procedures under the restructuring, and reflected the fundamental principle that each gas service must be offered on a comparable basis (em whether provided under bundled or unbundled tariffs.


Time was that operating changes drove communications changes, and employee acceptance was a given. The changes now permeating the utility industry, however, require us to think, and operate, differently. Operating and communications changes need to unfold simultaneously. If communications is constantly playing catch up to changing operations, employees begin to lose motivation and effectiveness. Eventually, customers notice and begin to complain.

Hawaii Oks PBOP Recovery

After considering the matter in several proceedings since 1991, the Hawaii Public Utilities Commission (PUC) has decided to permit the state's utilities to include in rates the full cost of switching from cash to accrual accounting for post-retirement benefits other than pensions (PBOPs) under SFAS 106. The PUC rejected proposals to require the utilities to alter certain SFAS 106 financial reporting requirements (em for example, extending the amortization period for recovery of PBOP transition costs from 20 to 40 years.