Fortnightly Magazine - March 15 1995

The Federal Communications Commission (FCC) has been rebuffed yet again by the courts in its effort to relax tariff filing requirements for nondominant common carriers. The U.S. Court of Appeals for the District of Columbia Circuit thwarted the FCC's latest attempt, rejecting proposed rules that would permit the nondominant carriers to file a range of rates rather than fixed rates tied to a schedule of charges.

The courts had earlier overturned a series of FCC rulings.

The process of determining how to implement utility competition is often cast as a struggle between two opposing camps: shareholders and ratepayers. There are, of course, two other major players, managements and regulators. The bipolar view tacitly assumes that shareholder and management interests coincide, and that regulators have customer interests at heart. Neither assumption is altogether valid. Shareholder interests deviate from management interests in important ways, just as the interests of the entrenched regulatory bureaucracy diverge from the public interest.

Following Congressional approval of the Energy Policy Act of 1992 (EPAct), Rep. Ed Markey (D-MA), a key sponsor of the bill's electricity title, predicted that "competition should replace monopolism as the rule for much of the power industry. Consumers, renewable energy, and the environment will be much the better for it."

Since then, however, Markey's vision has fallen under a cloud.

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.