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Law & Lawyers

Cinergy To Supply Power

The Blue Ridge Power Agency has chosen Cinergy Corp. as the recommended supplier of wholesale electric power to five of its members during a seven-year period starting July 1, 1998.

Blue Ridge is a "joint action agency" that assists in making wholesale supply arrangements for eight municipal electric systems in the western part of Virginia. Cinergy replaces American Electric Power-Virginia as the power supplier, and beat out the other finalists (em AEP, Commonwealth Edison, Enron, and LG&E Power Marketing.

Byline: 
Lori A. Burkhart
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Allegheny-Duquesne Merger Claims Billion-Dollar Savings

Allegheny Power System Inc. will merge with DQE Inc., parent company of Duquesne Light Co., to form Allegheny Energy, which will save both companies about $1 billion over the next 10 years.

The new company will have a total market capitalization of $10.6 billion: $6.2 billion in equity and $4.4 billion in net debt and preferred stock.

"Allegheny Power is a winter-peaking operation: Its low-cost, efficient operations and suburban and rural customer mix fit well with our summer-peaking operation and urban customer base," said David Marshall, President and CEO of DQE.

Byline: 
Lori A. Burkhart
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ALJ Refuses PECO's Stranded Cost Recovery

Pennsylvania Administrative Law Judge Louis Cocheres has recommended that the Public Utility Commission should deny a request by PECO Energy Co. to recover stranded costs from ratepayers through a surcharge over 10 years.

Pennsylvania State Sen. Vincent Fumo (D) had intervened in the proceeding against PECO's request. Fumo claims the ruling is significant because it points out that customers should not receive the financial benefits of deregulation if PECO is allowed to impose the surcharge.

"Although the final decision is still in the hands of the commission ...

Byline: 
Lori A. Burkhart
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Texas Merger May Prove Expensive

A Texas court has issued an interim order in the dispute between Central and South West Corp. and El Paso Electric Co. over their failed merger, ruling that Central and South West must pay El Paso a $25-million termination fee.

The proposed merger had been announced in 1993 and was terminated in 1995. Both companies had sued each other in a consolidated proceeding.

Chief Judge Larry Kelly of the U.S. Bankruptcy Court of the Western District also ruled that Central and South West may owe El Paso "interest-carry" costs alleged by El Paso at $18 million.

Byline: 
Lori A. Burkhart
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Illinois High Court to Hear Tax Case

The Illinois Supreme Court has agreed to hear an appeal filed by Ogle County tax authorities regarding the valuation of Commonwealth Edison's Byron nuclear plant for the tax years 1989-1992, and whether certain plant assets were taxable as real property or exempt as personal property.

The appeal concerns a December 1996 ruling by an Illinois appeals court that effectively changed an assessment from real to personal property.

Byline: 
Lori A. Burkhart
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Minn. PUC Delays Primergy Vote

The Minnesota Public Utilities Commission has said it will postpone a decision for two months on whether to approve the proposed merger of Northern States Power Co. and Wisconsin Energy Corp. to form "Primergy."

The PUC may not decide the matter until as late as August. A sunset clause kicks in just three months after that time, which would allow the utilities to back out of the deal.

Byline: 
Lori A. Burkhart
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Major Coal Study Released

The National Coal Council has released the findings of a major new study on coal prepared at the request of former DOE Secretary Hazel O'Leary, which found that while the generation of electricity from coal has increased, emission of pollutants from coal has decreased.

A similar report was released in April, conducted by Mills-McCarthy & Associates, and sponsored by the Western Fuels Association, Inc., the National Mining Association, and the Center for Energy and Economic Development.

Byline: 
Lori A. Burkhart
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Moody's Looks at Plant Divestiture

Moody's Investors Service has released a report that finds the most significant long-term implication of Order 888 for investors is for potential divestiture of transmission assets by investor-owned utilities.

The Moody's study, FERC Order 888 and Wholesale Competition: Catalyst for a New Market Model, also finds that divestiture by a vertically integrated utility may leave bondholders secured by a lien on relatively risky generating assets of often questionable market value, as opposed to the presently more diverse and balanced asset portfolio.

Byline: 
Lori A. Burkhart
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Murkowski to IRS: Hands Off Tax-Exempt Bonds

Senate Energy and Natural Resources Committee Chair Frank H. Murkowski (R-Alaska) has written a letter to Treasury Secretary Robert E. Rubin regarding regulation changes the Internal Revenue Service is considering, which would allow publicly owned utilities to expand use of tax-exempt bonds to compete against privately owned utilities.

Murkowski asked the IRS not to issue new regulations giving publicly owned utilities a "special competitive advantage" by allowing the companies to issue tax-exempt bonds.

Byline: 
Lori A. Burkhart
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In Brief...

Sound bites from state and federal regulators.

IntraLATA Toll Calling. North Carolina says newly certified competitive local exchange telephone carriers must apply for separate authority to provide intraLATA toll services, even though incumbent local carriers need not do so. Docket No. P-100, SUB 133, March 31, 1997 (N.C.U.C.).

Dialing Parity. Oregon PUC adopts policies on telephone dialing parity to allow all telephone users who choose alternate carriers to make calls without dialing extra numbers. Order No. 97-107, March 18, 1997 (Ore.P.U.C.).

Payphone Subsidies.

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