DC

As marketers discover, some LDCs keep a strong grip on the residential class.

Michael Meath of Agway Energy Products has a dream. A dream to tap the 4.5 million natural gas customers in New York State, supplying commodity and then, other services.

New York state unbundled gas rates in March 1996, with new tariffs approved later that year. Since then, just 11,000 customers out of 4.5 million (em less than half a percent (em have decided to use aggregated transportation service.

Not all New York utilities have filed customer aggregation programs, however.

Unexpected price increases for natural gas during the past winter heating season have stimulated action by state regulators across the country. Most recently, North Carolina and New Mexico have approved changes in adjustment clause and billing rules to temper the effect on consumers.

North Carolina. The North Carolina Utilities Commission opened a generic proceeding to consider shortening the notice period required for changes to benchmark natural gas commodity rates by local distribution companies.

Sound bites from state and federal regulators.

Build vs. Buy. Finding the "build" option as the cheapest alternative when two purchased power contracts expired, Florida PSC allows Tallahassee municipal electric utility to construct a 250-megawatt, combined-cycle, natural gas-fired power plant at an existing generation site. Docket No. 961512-EM, Order No. PSC-97-0659-FOF-EM, June 9, 1997 (Fla.P.S.C.).

Special Contract Discounts. New Jersey allows Elizabethtown Gas Co.

CalEnergy Company Inc. subsidiary CE Electric Inc. in mid-July appeared poised to take over New York State Electric & Gas Corp. But NYSEG fought the hostile takeover and won.

Although NYSEG had asked the New York Public Service Commission and the Federal District Court for the Southern District of New York to intervene, in the end, CalEnergy cited "lack of shareholder support" as its reason for terminating its bid.

A takeover attempt. CalEnergy Company Inc.

Regulators in Pennsylvania and New Jersey have taken steps to address relationships between natural gas utilities, customers, marketers and brokers operating in their respective states, announcing policies to cover such topics as fitness requirements, marketing practices and consumer protection.

One question that continues to raise concern is price arbitrage by marketers during supply emergencies that might affect service to captive residential customers.

Pennsylvania.

Sound bites from state and federal regulators.

Refusal to Wheel. Federal judge allows rural electric co-op to proceed with antitrust suit against PacifiCorp, ruling that doctrine of state action immunity does not insulate a regulated investor-owned electric utility from antitrust action for allegedly refusing to sell to sell power to others for resale to customers, or for allegedly refusing to wheel power generated by other suppliers.

An interview with Ralph Masiello

and Sue Scott of ABB

The big, traditional projects in automated meter reading have really stalled, because utilities are no longer assured of a return on investment."

That warning comes from Ralph D. Masiello, vice president and general manager, ABB Power T&D Co. Inc., the leading manufacturer of electric meters in North America.

"We used to understand the economics of AMR. Just compare the cost of AMR against the cost of metering. But now the economics have changed.

The Maine Public Utilities Commission has authorized Northern Utilities Inc. to recover coal-tar cleanup costs via a special surcharge.

Under a settlement agreement, ratepayers will pay the full amount of cleanup costs incurred by the LDC on a rolling five-year amortization schedule. The costs will be capped at 4 percent of the company's annual adjusted total firm revenues from sales and transportation customers. Shareholders will bear the carrying costs on all deferred balances during the amortization schedule.

Through two orders issued on June 11, the Federal Energy Regulatory Commission has set policy on return on equity for interstate natural gas pipelines (em specifically, the component of long-term dividend growth in the discounted cash flow model.

In both cases, the FERC applied the long-run growth rate of the economy, as measured by the U.S. gross domestic product. (See, Re Northwest Pipeline Corp. Opinion No. 396-B, Docket Nos. RP93-5-025 and RP93-96-005; Re Williston Basin Interstate Pipeline Co., Docket Nos.

Sound bites from state and federal regulators.

Appliance Repair Business. Responding to complaints from unregulated providers, New York rules that natural gas LDCs must run their appliance repair services through a separate subsidiary. PSC terms its existing policies "anachronistic" and finds that subsidies for appliance repair services are inappropriate. Case 93-G-0804, April 4, 1997 (N.Y.P.S.C.).

DSM Program Design. Michigan appeals court says state PSC exceeded authority and "impermissibly interfered with management decisions" of Detroit Edison Co.