Fortnightly Magazine - November 15 1995

Idaho Power Seeks ADITC Tie-In

Idaho Power (IP) has filed a notice of settlement with the Idaho Public Utilities Commission (PUC), its first step toward gaining approval to accelerate amortization of accumulated deferred investment tax credits (ADITC) when year-end return on equity (ROE) falls below 11.5 percent. If the PUC agrees, the agreement would remain in effect from 1995 through 1999.

Electric Price Caps for Edison Sault

The Michigan Public Service Commission (PSC) has approved a price-cap electric regulation plan for Edison Sault Electric Co. Edison will cap base rates at existing levels, roll its existing power-supply cost-recovery (PSCR) factor into base rates, and suspend the PSCR clause prospectively. The utility will then be authorized to change initial rates upon 30 days' written notice to the PSC, as long as the altered rates for each class do not exceed initial rates.

Yanks Give Up in England

Texas Energy Partners plc (TEP), formed by Central and South West Corp. and Houston Industries, Inc. (HIE) to acquire a British electric distribution company, NORWEB plc, has given up the takeover attempt.TEP had made a $2.7-billion friendly acquisition offer for NORWEB, which serves about 2 million customers in northwestern England. The offering followed the successful acquisition of a British retail system, South Western Electricity (SWEB), by a U.S.

Nine Mile 2 Loses Out on Performance Incentive

The New York Public Service Commission (PSC) has canceled efforts to develop a performance incentive mechanism for costs associated with the Nine Mile 2 nuclear power plant. The efforts stemmed from a 1993 settlement that determined recoverable plant operation and maintenance costs. The PSC said its staff had withdrawn from ongoing incentive negotiations, citing a "change in emphasis" from specific to broad-based incentives in electric regulation.

Scientists Support SDG&E in EMF Case

Fourteen scientists, the

American Medical Association, and the California Medical Association have filed briefs with the California Supreme Court stating that they find no link between cancer and electromagnetic fields (EMF) from electric transmission lines: "The physics and cellular biology, combined, strongly indicate that it is not scientifically reasonable to believe that 60 Hz magnetic fields increase the incidence of cancer." The briefs were filed in a case involving San Diego Gas & Electric (SDG&E), which is being sued by the Covalt family, who claim that EMF from power li

N.Y. Finetunes Gas Restructuring

The New York Public Service Commission (PSC) has modified an earlier ruling (Re Restructuring of the Emerging Competitive Natural Gas Market, 158 PUR4th 553 (N.Y.P.S.C. 1994)) that set forth a policy framework to guide the post-Order 636 transition of the state's natural gas distribution industry. The 1994 ruling divided local distribution company (LDC) customers into core and noncore groups, and allowed flexible market-based pricing for unbundled services to the noncore group.

FMPA Lawsuit Raises Pricing Issues

The Florida Municipal Power Agency (FMPA) is continuing a $140-million

antitrust lawsuit against Florida Power & Light Co. (FP&L), alleging that FP&L denied equal access to its electric transmission network. FMPA represents 10 municipal utilities, which pay FP&L for access to transmission lines. FMPA claims that FP&L violated antitrust laws by restricting network access and inflating access costs. FP&L says it offered transmission access to the municipalities, but the parties cannot agree on a price.

Florida Approves QF Load Curtailment

The Florida Public Service Commission (PSC) has approved a Florida Power Corp. plan to curtail its purchases from qualifying cogeneration facilities (QFs) during minimum load conditions. The PSC said that minimum load conditions typically occur between midnight and 6:00 a.m. when weather is mild and system demand low, and that the utility had curtailed QF purchases seven times in late 1994 and early 1995.

Recovering Local Distribution Costs

In electric power, telecommunications, water, and natural gas, the costs of local distribution make up a significant share of the cost of providing services. For any network or system, the cost of distribution facilities is largely or entirely independent on usage; i.e., such costs are largely invariant to the number of phone calls, kilowatts, British thermal units (BTUs), or gallons that customers use.

Perspective

California regulators and the utilities they oversee have been talking a lot in recent years about competition. But just being able to "talk the talk" isn't enough (em utility companies and the regulators who monitor them have got to "walk the walk." And on that score, they've just barely begun to crawl. Despite all the marketing hype, the monopoly mindset is still very apparent among industry officials and regulators.Take California's energy industry, for example.

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