Question: Will your commission still be around in the year 2000? If so, what will it look like? Are you restructuring your commission with the same fervor you devote to electricity, gas, and telecommunications?Response by Nancy McCaffree, Chair, Montana Public Service Commission:

As a regulator I have had the opportunity to listen to economists, energy planners, and other professional soothsayers. I have come to the conclusion that the only certainty pertaining to future forecasts is that they will be wrong 100 percent of the time.

State and federal regulators and the industries we regulate have donned life jackets. It's as if we are boating down the unexplored Grand Canyon with John Wesley Powell1 in 1869. We share a vague vision of what lies at the mouth of the canyon, but the rapids are treacherous and uncharted.

On the river, boatmen and women often scout the tough rapids from the shore. Back on the river, they carefully set themselves up at the proper position and angle, then apply deft, sometimes powerful, strokes at crucial moments.

Twenty-five centuries ago, 300 steadfast Spartans, defending their sacred Greek turf, held up Xerxes's Persian army at the pass at Thermopylae just long enough for the Persians to lose the opportunity to conquer Greece. The world would have been quite different if the Spartans had just "given way."Contemporary state public utility regulators number just about that of those plucky Spartans.

The costs of providing telephone service to rural America are much higher than for more urban areas of the country. By definition, small rural subscribers are scattered throughout large geographic areas. In rural areas, the average number of subscribers per route mile runs about 6.3; the average number of subscribers per square mile is 4.4.

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.

Companies: BRAZ (Brazos Electric Cooperative); COA (City of Austin); CPL (Central Power & Light); CPS (Central Public Service); GSU (Gulf States Utilities); HLP (Houston Lighting & Power); LCRA (Lower Colorado River Authority); SPS (Southwestern Public Service); SWEP (Southwestern Electric Power); TNP (Texas New Mexico Power); TU (Texas Utilities Electric); WTU (West Texas Utilities).Assumptions: Statewide economic dispatch, where all utilities receive the market-clearing marginal energy cost for their generation (similar to studies that Moody's Investors Service has

The Minnesota Public Utilities Commission (PUC) has authorized Northern Minnesota Utilities, a natural gas local distribution company (LDC), to insulate shareholders from the effects of losing a large firm sales customer by reallocating associated demand costs among remaining firm customer classes. It allowed the LDC to pass the increased costs through its purchased adjustment clause, finding that the utility was now alerted to the problem and had taken action to protect itself and its ratepayers from stranded costs caused by customers switching to interruptible transport service.

While approving a proposed rate discount program for new electric heating customers, the Maine Public Service Commission (PSC) has ruled that the program must meet "permanent load" requirements designed to protect ratepayers. Bangor Hydro-Electric Co. had filed proposals to market power to new electric heating customers at 5 cents per kilowatt-hour, as a temporary addition to its load requirements, with a price floor based on short-run marginal costs.

The New Jersey Board of Public Utilities (BPU) has approved a plan by Jersey Central Power & Light Co. to replace its existing economic development tariffs with a new "Business Enhancement Incentive" rider. The tariff revision would continue programs designed to further the building expansion and use plans of large customers by offering discounted rates, but would eliminate ineffective programs such as per-worker rebates, priority location rebates, and high energy-efficiency programs.

The Massachusetts Department of Public Utilities (DPU) has accepted a settlement agreement calling for approval of gas-forecasting, supply-planning and demand-side management (DSM) efforts by Berkshire Gas Co., a natural gas local distribution company (LDC). Nevertheless, the DPU directed the LDC to undertake a good-faith effort to quantify avoidable environmental costs

and to incorporate those findings in rescreening its DSM options.