The Federal Energy Regulatory Commission (FERC) announced that qualifying facilities (QFs) that fail to meet the standards needed to retain QF status will be required to file wholesale rates for sales during the period their facilities do not comply (Docket Nos. EL94-45-001 and QF88-84-006).

The FERC asked QFs to be as vigilant as possible. The new policy states that if a QF fails to comply with the regulations, fails to receive a FERC waiver excusing the lapse, and then returns to noncompliance, the QF will be required to file rates for the noncompliance period.

The FERC has proposed major revisions to the secondary market for interstate capacity, offering interstate pipelines and holders of interstate capacity the opportunity to participate in experimental programs to help determine the effectiveness of the proposed changes (Docket Nos.

A divided Federal Energy Regulatory Commission (FERC) has set for expedited hearing the proposed merger between Baltimore Gas and Electric Co. (BGE) and Potomac Electric Power Co. (PEPCO) to form "Constellation Energy Corp.," to determine its effect on competition (Docket Nos. EC96-10-000 and ER96-784-000).

It will also consider the applicants' proposed open-access transmission rates. An administrative law judge will certify the record to the FERC by November 1.

Sound bites from state and federal regulators.

Economic Development Rates. Michigan rescinds existing guidelines for economic development rates in favor of "case-by-case" development and review. Case No. U-11065, July 16, 1996 (Mich.P.S.C.).

Least-cost Planning. Maine considers repeal of obsolete portions of its least-cost planning regulations for electric utilities. Dkt. No. 96-371, July 9, 1996 (Me.P.U.C.).

Gas System Acquisitions. Alabama allows Alabama Gas Corp. to buy municipal gas distribution system and include purchase price in rates. Dkt.

A new law could help New York utilities reduce electric rates

and improve their balance sheets.

Legislation recommended by Gov. Pataki on June 1, 1996, seeks to provide the New York Public Service Commission (PSC) with a new financial tool to address possible stranded costs as the state moves toward a competitive retail electric market.

The California Public Utilities Commission (CPUC) has approved a proposal by San Diego Gas & Electric Co. (SDG&E) to switch to an automatic adjustment mechanism to determine cost of capital (em a move that could save the utility approximately $100,000 per year in regulatory costs.

The Utah Supreme Court has ruled that a municipal utility must serve all customers in new areas that it takes over by annexation (em not just a select few.

Moreover, the city must compensate the former supplier of utility services for any dedicated facilities, even if it uses its own municipal facilities to serve the new area. However, the city will owe compensation for lost profits only if the municipality fails to obtain the prior consent of the supplier or to pay for the cost of the associated facilities.

The Maine Public Utilities Commission (PUC) has agreed to hear a complaint by employees of an industrial customer of Central Maine Power Co. (CMP). The employees allege unfavorable pricing actions against their employer, Yorktowne Paper Mills, including denial of service at the requested voltage. The complaint asks for reparations for prior overcharges.

The Ohio Public Utilities Commission (PUC) has reaffirmed an order issued on May 8 in which it struck down a tariff proposed by Toledo Edison Co. that would have barred resale of service by commercial customers. The PUC rejected allegations by Toledo Edison that the ruling constituted a breach of its duty to regulate electric service to end users. It declined to regulate disputes that it characterized as occurring between landlords and tenants, where the landlord is not operating as a public utility. See, Brooks, et al. v. Toledo Edison Co., Case No.

The Maine Public Utilities Commission (PUC) has opened a docket to investigate how and to what extent it should regulate "energy-related products and services other than electric service" offered by Central Maine Power Co.

In lieu of price regulation, the utility had proposed setting prices to cover its marginal cost for

specific offerings, including: 1) inspection and maintenance of customer-owned substation facilities, 2) energy control systems and services, 3) construction of customer-owned pole lines, and 4) maintenance and repair of customer-owned lighting equ