In a preliminary ruling, the Florida Public Service Commission (PSC) has proposed several changes to its rules for setting a generic rate of return on common equity (ROE) for water utilities. The proposed leverage formula produces a suggested ROE range of 10.18 to 11.88 percent, based on an equity ratio of 40 percent. The change represents an increase of 55 basis points over the midpoint indicated by the existing formula. According to the PSC, the update incorporates changes in underlying market conditions, including bond yields and required rates of return.

The Montana Public Service Commission (PSC) has decided not to adopt federal standards for natural gas integrated resource planning (IRP) and demand-side management (DSM) contained in section 115 of the Energy Policy Act of 1992 (EPAct), concluding that current information did not support establishing formal standards in those areas. The PSC explained that the expected costs of future commission involvement in the matter outweigh the benefits that might reasonably be expected at this time. Re Section 115, Energy Policy Act of 1992, Order No. 5861, Docket No. 94.9.42, Aug.

history of generation, technology

devolved at a very slow pace after

the construction of the first generation

of large central generation stations. With

the development of nuclear energy in the

1940s and 1950s, the government promoted an

alternative energy source that was expected to

provide a cheap source of power as well as

provide a source of plutonium for nuclear

weapons development.

The profound changes now occurring in the electric industry will most directly affect those who are engaged in the enterprises of generation, transmission, and distribution of power. But challenges and opportunities confront gas companies as well. Certainly, the electric industry will continue to influence markets for gas: both in bulk fuel supply and in retail energy.

Stephen P. ReynoldsPresident & CEO

Pacific Gas Transmission Co.

Two or three years ago, gas-fired generation was hailed as a cure-all for everything that ailed the natural gas industry.

Erroll B.

Stephen P. Reynolds

President & CEO

Pacific Gas Transmission Co.

Standardization has been an issue in every industry since the beginning of the Machine Age. As products continue to evolve, we need something like GISB to help find a prudent and appropriate level of standardization.

Erroll B. Davis, Jr.

President & CEO

Wisconsin Power & Light Co.

WP&L advocates that the following steps be taken to create a level playing field for merchants entering the retail market:

s Distribution rates should be fully unbundled from retail sales tariff rates.

In the wake of Federal Energy Regulatory Commission (FERC) Order 636, gas marketing entrepreneurs gained unprecedented opportunities to compete for noncore, industrial loads. That market has matured.

A couple weeks ago, on a beautiful Sunday morning, I picked up my briefcase and wandered down to the Potomac river shoreline to catch up on my summer reading list. There, on the Virginia side, gazing across the river at the Lincoln Memorial, Washington Monument, and Capitol dome, I gathered strength to tackle a foot-high mound of paper.