In a case involving automatic adjustment clause procedures for state utilities, the Minnesota Public Service Commission (PSC) has directed Northern States Power Co. to make major modifications to its accounting system for gas costs. While approving a requested variance of its adjustment clause rules to allow the utility to recover a $1.05 million undercollection in its gas cost true-up rate, the PSC found the error due to the complexity of accounting for gas sales.

The Ohio Public Utilities Commission (PUC) has approved a settlement agreement in a case involving a safety code investigation of Columbia Gas of Ohio, Inc., a natural gas local distribution company. The PUC had directed its staff to investigate whether Columbia Gas had violated safety code provisions governing maximum allowable operating pressures for pipeline segments.

The Connecticut Department of Public Utility Control (DPUC) has adopted new cost-of-service guidelines allowing natural gas local distribution companies (LDCs) to develop unbundled rate structures, including cost-based firm transportation rates. The DPUC also issued suggestions for refining existing supply and demand forecasting methods. According to the DPUC, current cost-of-service studies did not adequately address interclass subsidies at existing rate levels.

Standard & Poor's (S&P) CreditWeek Municipal notes that municipal electric utilities are resisting the investor-owned utility (IOU) merger trend in favor of competing through internal cost controls and sharing of services. The main reason, according to S&P directors Marla Fox and William Cox, is that municipals are political entities governed by city councils or appointed boards, and mergers would result in less authority for those decisionmakers.