Commission

Off Peak

New thinking defines "stranded costs" in terms of

asset value and return on capital, not lost revenues.

On July 3, the Pennsylvania Public Utility Commission (PUC) submitted its report to the Governor and General Assembly on retail electric competition (PUC Docket No.

I-940032).

North Dakota OK's Primergy Merger

The North Dakota Public Service Commission (PSC) has approved the Primergy merger between Northern States Power Co. and Wisconsin Energy Corp.

As an important factor in its decision, the commission noted that after the merger, Primergy plans to reduce North Dakota electric rates by 1.5 percent and gas rates by 1.25 percent, with a moratorium on increases until 2001.

Local Exchange Resale: Two Views

Two recent decisions from Hawaii and Michigan illustrate some of the issues now arising on the question of resale of telephone service by local exchange carriers (LECs).

In Michigan, the state public service commission has directed the state's LECs to offer all basic local exchange services for resale in a nondiscriminatory manner to competitors and affiliates at wholesale rates. It defined "wholesale rates" as retail rates less the avoided costs to the LEC.

Purchased Power: How Much n the Fuel Clause?

The North Carolina Utilities Commission (NCUC) has rejected a request by Duke Power Co. to recover as a cost of fuel some 90 percent of the price of bulk power purchased from Enron Power Marketing, Inc.

Instead, it allowed Duke to recover only 59 percent Enron purchases, the level of fuel costs Enron could verify by directly contacting the generating utilities. Nevertheless, it said it would not accept "hearsay" evidence on the share of costs attributable to fuel.

Rules Issued for Electric Rate Discounts

In a case involving San Diego Gas & Electric Co. (SDG&E), the California Public Utilities Commission (CPUC) has OK'd new guidelines for preapproved contracts designed to obtain, attract, or retain new electric customers. The guidelines also apply to contracts designed to stem self-generation or avoid customer flight out of state.

The CPUC also will allow SDG&E to negotiate a rate discount contract with any customer, for any purpose, as long as shareholders absorb 100 percent of revenue losses and rates reflect a price floor based on customer-specific marginal cost.

Long-distance Rates Must Track Access Charges

The North Carolina Utilities Commission (NCUC) has upheld an earlier ruling (issued May 2) that required interexchange carriers (IXCs), on a dollar-for-dollar basis, to reduce rates for basic intrastate message telephone service (MTS) so as to flow through to MTS customers certain reductions in local telephone access charges.

It denied requests by the IXCs to share the rate reductions with all switched-access customers, rather than target the rate cuts to basic toll services only.

States Differ on Residential Gas "Subsidy"

In two recent natural gas rate cases, regulators have split over the question of alleged rate subsidies in favor of residential customers.

In the first, the Rhode Island Public Utilities Commission (PUC) approved a proposal by Providence Gas Corp., a natural gas local distribution company (LDC), to redesign its rates to remedy "the ongoing subsidization of the residential class by commercial and industrial customers."

In Minnesota, however, the state PUC rejected a similar plan by Minnegasco to use an embedded-cost allocation method to shift the revenue bu

Order 636 Upheld, with Remands

The U.S. Court of Appeals for the District of Columbia Circuit on July 16 upheld Order 636, which required unbundling of natural gas pipeline sales and transportation services, but remanded at least six issues to the Federal Energy Regulatory Commission (FERC) for further explanation (United Distr. Cos. v. FERC, No. 92-1485, July 16, 1996).

Nuclear Waste Bill Heads to House

With President Clinton and the Department of Energy (DOE) staunchly opposed, the House of Representatives was expected to return September 4 from August recess to take up its version of a nuclear waste disposal bill that passed in the Senate on July 31 by a vote of 63-37.

Senate bill 1936 and its amendments call for a temporary storage facility at the Nevada nuclear test site near Yucca Mountain before the end of 1999.

Long-Distance Firms May Triumph in Texas

The Texas Public Utilities Commission (PUC) has issued a preliminary order allowing Sprint Communications to enter the local-exchange market without committing to a lengthy plan to build a telecommunications network.