Moody's Investors Service has placed the Baa2 long-term credit rating of Houston Industries Inc. (HII), parent company of Houston Lighting & Power (HL&P), under review for possible upgrade. The main catalyst is HII's January agreement to sell its cable television assets valued at $2.24 billion in exchange for cash and securities to Time Warner Inc. Another factor is HL&P recent settlement with the city of Houston in its rate proceeding. Although it includes a $367-million annual rate reduction, Moody's says the settlement will have "minimal impact" on the utility's credit rating.
Fortnightly Magazine - March 15 1995
Florida Power Corp. has won approval for a three-year experiment to remove existing disincentives to investment in conservation programs by "decoupling" residential revenues from sales for ratemaking purposes. The mechanism permits customer surcharges and refunds if revenue levels vary from targeted levels.
The new mechanism relies on a per customer revenue target figure based on the allowed revenue and average residential customer count used in the company's last rate case.
Public Service Co. of Colorado (PSCC) and IBM have announced a strategic alliance. IBM's subsidiary, Integrated Systems Solutions Corp. (ISSC), and a new PSCC subsidiary, e prime, will develop and deliver new information technology applications to improve utility customer service. E prime's first project will be to help IBM develop a natural gas procurement strategy to reduce energy costs and improve the quality and reliability of its energy services. ISSC will manage most of PSCC's information technology systems and network infrastructure.
The U.S. Court of Appeals for the Third Circuit has ruled that the New Jersey Board of Public Utilities (BPU) is preempted under the federal Public Utility Regulatory Policies Act (PURPA) from ordering a qualifying facility (QF) and an electric utility to renegotiate or settle on a buy out of a previously approved purchased-power agreement. The QF, Freehold Cogeneration Associates, L.P. had refused to alter its contract with Jersey Central Power & Light Co.
Fitch Investors Service has assigned competitive rankings to 60 of the nation's largest public power and investor-owned electric utilities (IOUs). The top three IOU slots in the Fitch Competitive Indicator (FCI) go to Duke Power Co., Potomac Edison Co., and Northern States Power Co.
The Massachusetts Supreme Court has ruled that the state's Energy Facilities Siting Board could not rely on a ruling by the Massachusetts Department of Public Utilities (DPU) to determine project need as part of the construction approval process for a qualifying facility (QF). The Siting Board had found itself unable to determine the need for a 170-megawatt gas-fired cogeneration project proposed by Altresco Lynn, Inc. because it was unclear whether Massachusetts utilities would require surplus power from out-of-state suppliers before 2000.
Tennessee Valley Authority (TVA) chairman Craven Crowell wants TVA to be able to compete with other utilities for customers outside its service territory. Congress established the territorial boundaries in 1959, limiting TVA and distributors of TVA power to the areas they served as of July 1 of that year. Speaking at the American Public Power Association in Washington, DC, on February 1, Crowell said he has commissioned a study by Palmer Bellevue to examine how to remove the "fence" that prevents TVA from expanding.
The Michigan Public Service Commission (PSC) has dismissed an application by Consumers Power Co. for authority to implement its controversial "Rate K" competitive tariff for electric service. The utility had claimed that greater pricing flexibility was necessary to meet substantial competition from self-generation, new municipal utilities, and utilities outside the state, but the PSC found that due to numerous objections to the rate plan and subsequent modifications of the proposal by Consumers, the proceeding had become so complex that the docket should be closed.
Two New York Public Service Commission administrative law judges (ALJs) have recommended that Niagara Mohawk Power Corp. (NMP) be allowed to increase its 1995 electric and gas rates by $57 million (1.9 percent) and $10.7 million (1.7 percent), respectively (Docket Nos. 94-E-0098, 94-E-0099, and 94-G-0100). The proposal contrasts sharply with the PSC's 1994 recommendation to cut NMP rates by 7.1 percent over five years. NMP had asked for a 1.8-percent hike in electric rates, and a 4.2-percent increase in gas rates.
The Tennessee Public Utilities Commission (PUC) has opened a generic proceeding to establish a policy governing recovery of Order 636 pipeline transition costs by natural gas local distribution companies (LDCs). The PUC noted that one LDC, Nashville Gas Co., is currently recovering costs from all customer classes based on total system throughput, but has agreed to halve the charge for interruptible customers. Other LDCs use different methods to assess the costs to customers.