Stranded Costs Projected at -$2.9B to $22B

The Texas Public Utility Commission (PUC) was scheduled this month to consider estimates of retail competition's impact on electric utilities.

A draft staff report, yet to be reviewed by the PUC, estimates stranded costs that span a high of $22 billion to a low of negative $2.9 billion.

The Michigan Public Service Commission (PSC) has approved a request by Detroit Edison Co., to offer a special discount contract to one of its large industrial customers, MasoTech, Inc. The customer had failed in an earlier attempt to compel the utility to offer transmission service so that it could gain "direct access" to other sources of electric power. See, Re MasoTech Forming Technologies, Inc., 168 PUR4th 142 (Mich.P.S.C.1996).

The Pennsylvania Public Utility Commission (PUC) has decided that Bell Atlantic-Pennsylvania, Inc., a local-exchange telephone carrier (LEC), should reduce rates for its residential digital high-speed service offerings. The residential Integrated Service Digital Network (ISDN) service enables users to access and send voice, data, and imaging services at the same time over their telephone lines.

As part of its ongoing investigation of electric industry restructuring, the Nevada Public Service Commission (PSC) has issued a report and solicited comment on appropriate regulatory response to customer bypass requests.

The Pennsylvania Public Utility Commission (PUC) has authorized Columbia Gas of Pennsylvania, Inc., a local distribution company (LDC), to 1) expand transportation "to potentially capture all residential customers," and 2) institute a voluntary capacity-assignment pilot for residential and small commercial users only. The new transportation service will give residential customers the option of purchasing gas from a marketer by allowing them to aggregate in groups of up to 50 to meet the 5,000-Mcf volume threshold in the tariff.

The Pennsylvania Public Utility Commission (PUC) has adopted new rules for intrastate gas transportation tariffs filed by local distribution companies (LDCs) in the state. Earlier in the year it had issued a set of "tentative" regulations to serve as a basis for discussion of changes in the gas industry. See Re Gas Transportation Tariffs, 169 PUR4th 212 (Pa.P.U.C.1996).

According to the PUC, the final rules are based on a "reasonable sharing" of opportunities, risks, and obligations.

The Idaho Public Utilities Commission (PUC) has modified the method electric utilities must use to conduct avoided-cost negotiations with qualifying cogeneration facilities (QFs). A new interim standard for large QF projects (greater than 1 megawatt) calculates avoided costs based not on displaced purchases from a single, hypothetical power plant, but on information in the utility's resource plan.

The Massachusetts Department of Public Utilities (DPU) has decided to use separate cost methods 1) to determine whether a local telephone service is subsidized, and to set price floors for essential monopoly services provided by NYNEX, a local exchange carrier (LEC); and 2) to set rates and price floors for competitive services.

According to the DPU, Total Service Long Run Incremental Cost (TSLRIC) was undisputed as the proper method of testing for subsidies between services.

While authorizing Northern Utilities, Inc., the sole instate natural gas local distribution company (LDC), to contract with an affiliated company to provide storage capacity and services, the Maine Public Utilities Commission (PUC) has directed the utility to file an unbundling tariff proposal that includes transportation, load-balancing, and third-party merchant services.

Under the approved supply arrangement, Granite State Gas Transmission, Inc. will provide storage capacity and service from a liquefied natural gas facility in Wells, ME.

The Michigan Public Service Commission (PSC) has rejected a proposal by Michigan Gas Utilities, a local distribution company (LDC), to implement a 70/30 sharing mechanism for capacity-release revenue. (The LDC currently credits all such revenues to its customers through a gas-cost recovery mechanism.)

The PSC found the LDC's incentive plan lacking in safeguards to ensure that the company does not earn a windfall profit at the expense of ratepayers.