CPUC

Price-cap Reforms Reflect Local Competition

Citing heightened competition and lower earnings in the state's local exchange telephone market, the California Public Utilities Commission (CPUC) has frozen price caps for local exchange carriers (LECs) for most noncompetitive local services, and has suspended the 5-percent "x-factor" services for an intermediate level of competition.

Reliability, Not Economy, Dictates Transmission Line

The California Public Utilities Commission (CPUC) has approved a proposal by Sierra Pacific Power Co. to construct a 345-kilovolt overhead transmission line, but not simply to gain access to low-cost power. Instead, the CPUC appeared to emphasize concern over reliability.

Sierra Pacific, involved in merger plans with The Washington Water Power Co., had cited access to low-cost power from the Bonneville Power Administration as an important reason to build the transmission line.

Calif. Restructuring Impairs Muni Credit Ratings

Moody's Investors Service has completed its Western Grid Surveillance Review, a study that assessed the potential impact of the California Public Utilities Commission's (CPUC's) electric restructuring proposal on municipal utilities in that region.

Frontlines

Lately I'm reading up on the new Telecommunications Act. Last week I printed a copy from the Internet and stuffed it in my briefcase. Each night on the train I give it a go and skim a few sections.

The new law unabashedly favors competition over regulation, but appoints state commissions (PUCs) to certify when that competition may be deemed effective enough to open markets. Thus, the PUCs will take at least one last shot at managing markets before they relax regulation for competitive services.

Industry Reorg. Prompts Same at Corporate Level

The California Public Utilities Commission (CPUC) has approved a corporate reorganization plan making San Diego Gas and Electric Co. (SDG&E) a wholly-owned subsidiary of a holding company structure formed by the utility. The utility said the reorganization would provide the separation of lines of business necessary to insulate regulated utility cash flows from the volatility and risk of competitive markets.

California Retains Affirmative Action Targets

The California Public Utilities Commission (CPUC) has decided not to increase voluntary goals for utility purchases from businesses owned by minorities and by women. The CPUC has also amended its rules on affirmative-action purchasing plans to state that "no penalty shall be imposed for failure of any utility to meet and/or exceed goals."

In 1988, the CPUC had set a goal that utilities must seek to purchase 20 percent of their goods and services from firms listed in the state-mandated program: 15 percent from minority firms and 5 percent from firms owned by women.

State Reviews Marginal Cost Pricing for Gas LDC

While examining cost allocation and rate design for natural gas distribution services provided by Pacific Gas and Electric Co., a local distribution company (LDC), the California Public Utilities Commission (CPUC) has concluded that the long-run marginal cost method it adopted in 1992 was not proving effective in producing prices observed in fully competitive markets.

California Orders Tracking for Pipeline Reservation Charges

The California Public Utilities Commission (CPUC) has directed Southern California Gas Co. (SoCalGas) to set up a special account to track savings from reduced reservation charges for interstate gas pipeline capacity. The cost savings will track efforts by SoCalGas to reduce capacity reservations on the El Paso and Transwestern pipeline systems.

The CPUC also set up a process to review allocation of savings between core and noncore customers.

Costs Denied for Pipeline Oversubscription

The California Public Utilities Commission (CPUC) has concluded that Pacific Gas and Electric Co. (PG&E) acted imprudently in deciding to enter a 15-year contract for interstate capacity on Transwestern Pipeline Co. expansion projects that came on line in 1992. It disallowed recovery of the costs associated with the Transwestern commitments in 1992 and in each subsequent year of the 15-year contract. The disallowed amount for 1992 is $13.6 million for the utility's gas department and $4.5 million for its electric department.