Evaluating Power Plant Property Taxes Under Deregulation

THREE FACTORS (em RESTRUCTURING, TECHNOLOGY AND environmental controls (em now create both reason and opportunity for electric utilities to lower their property taxes, which often make up a substantial cost of doing business.

Property tax valuation is fairly straightforward. Most states compute property taxes on fair market value, or what a hypothetical buyer and seller would agree the property is worth, with both parties having knowledge of the relevant facts and neither compelled to buy or sell.

Idaho Supports DSM: Florida Retreats

The Idaho Public Utilities Commission has rejected a request by Intermountain Gas Co. to cut demand-side management and conservation requirements from its integrated resource planning guidelines, despite company claims that reforms were needed to align the planning process with current business practices.

Meanwhile, the Florida Public Service Commission has authorized Florida Power and Light Co. to terminate an existing research and development program for a new gas-driven technology.


IPPs Lose Bid To Supply N.J. Utility

The New Jersey Board of Public Utilities has approved a proposal by Jersey Central Power and Light Co., an electric utility, to meet its short-to-medium-term power needs by purchasing power from utility-owned generating facilities located in New York, Ohio and Pennsylvania.

Under the agreement, the utility will purchase a total of 700 megawatts of power over an eight-year period from Pennsylvania Power and Light Co., Cleveland Electric Illuminating Co. and Niagara Mohawk Power Corp.


If truth is the first casualty of war, as we learned from author Mark Krebs ("It's a War Out There: A Gas Man Questions Electric 'Efficiency,'" December 1996, p. 24), then certainly the truth has been mutilated beyond recognition.

His article, which suggests that electric utilities have used conservation and demand-side programs improperly (to build electric load at the expense of natural gas!) is full of inaccuracies, misleading charts and other errors.

In Brief...

Sound bites from state and federal regulators.

Gas Franchise Rights. North Carolina adopts new rules on gas service expansion under a 1995 state law forcing incumbent gas distributors to forfeit exclusive franchise rights in unserved territory in certain cases, but allows a two-year grace period if the utility can show a commitment to build plant needed to reach unserved areas. Docket No. G-100, Sub 70, Mar. 19, 1996 (N.C.U.C.).

Firm vs. Interruptible. Idaho OK's proposal by Washington Water Power Co.

Nova Scotia Continues IRP, Favors Electric TOD Rates

The Nova Scotia Utility and Review Board has directed Nova Scotia Power Inc., an electric utility, to design and submit time-of-day (TOD) rates based on energy costs for all classes of customers except residential users. At the same time it denied a call for less emphasis on resource planning, and disallowed half the costs incurred for an executive compensation incentive program.

The Board rejected a proposal by the utility to redesign rates to reflect time of use by implementing seasonal rates, using on-peak demand levels for billing purposes.

Resource Plan Finds Shareholders Funding Low-income Programs

The Rhode Island Public Utilities Commission (PUC) has approved a plan by which shareholders of Providence Gas Co., a natural gas local distribution company (LDC), will fund existing low-income assistance programs. The PUC approved the plan as part of settlement agreement in a case involving a new integrated resource plan (IRP) for the LDC.

Funds for the low-income assistance programs will come from gas-cost savings earned by the LDC under new performance-based IRP reforms approved by the PUC.

Gas Restructuring Leaves Doubts About IRP

In a case reviewing standards for integrated resource planning (IRP) set out in the Energy Policy Act of 1992 (EPAct), the Pennsylvania Public Utility Commission (PUC) has recognized that changes in the natural gas industry, combined with an evolution toward competition (both upstream and inside the city gate), "will make gas IRP a less-necessary commission function in order to insure least-cost gas service."

The PUC said most of its existing regulations were consistent with the federal standards; however, it rejected the EPAct standards regarding guaranteed profitability an