Off Peak

A few utility executives claim to sleep untroubled by the future of their companies. Most, however, admit to some tossing and turning engendered by concern over competition and the complacency of coworkers.

What, if anything, are they doing about it?

A survey of 117 PUBLIC UTILITIES FORTNIGHTLY subscribers reveals that American utility executives are asking themselves all the tough questions about the future of their operations. It also reveals a widespread sense of urgency in the search for answers.

Montana PSC Limits LDC Rate Increase

The Montana Public Service Commission (PSC) has authorized Montana-Dakota Utilities Co., a natural gas local distribution company (LDC), to increase rates by $1.008 million. The increase includes an allowance for return on common equity of 12 percent. The PSC permitted the new rates to enable the LDC to recover the entire nongas cost increase from the residential customer class. It refused, however, to approve rate rebalancing to shift an additional $1.5 million of revenue requirement to the residential class without a thorough study of both gas and nongas costs.

Phantom Taxes: The Big Paycheck

The restructuring debate in the electric industry has focused on nuclear assets at risk for "stranding" under deregulation, while another issue has largely eluded public scrutiny: accumulated deferred federal income taxes (ADFITs). ADFITs represent money that utilities have received from ratepayers to cover federal tax expenses not yet actually recognized and paid.

FERC to Standardize Gas Practices

The Federal Energy Regulatory Commission (FERC) has issued a proposed rule to standardize the business practices of open-access

natural gas pipelines (Docket No. RM96-1-000). The rule would adopt the 140 standards recently filed by the Gas Industry Standards Board (GISB).

The proposal calls for a standard Internet connection between pipelines and customers, to eliminate the disparity in procedures and interfaces that have caused confusion to date.

Jury Awards EMF Damages Discrimination

For the first time, monies have been awarded in an electromagnetic field (EMF) suit. Although it decided that a high-power underground electric transmission line did not cause cancer in Atlantic Electric Co. (AE) customer John Altoonian, a six-person jury has ordered the utility to pay him about $760,000 in damages for lost wages and emotional distress. The first jury was hopelessly deadlocked; the current alternate panel found AE unintentionally negligent. AE calls the award "confusing" and plans to appeal. (em LB

Joseph F. Schuler, Jr.


Three separate utilities have formed subsidiaries:

s The Columbia Gas System, Inc.'s new unit, Columbia Service Partners, Inc. will market new, nongas needs to homeowners and businesses, including warranty, fuel management, and gas-line repair services.

s Brooklyn Union's new gas marketing affiliate, KeySpan Energy Services, Inc., will buy and sell gas and provide transportation and related services, first to commercial and industrial customers, then to aggregated commercial and residential customers.

A Champion for Public Power

Soft-spoken, but no featherweight,

APPA Director Alan Richardson will fight

toe-to-toe with well-heeled

adversaries. If he were a boxer, his name might be Alan "The Right" Richardson.

The executive director of the American Public Power Association (APPA) always toes the canvas, swinging for equity for his 1,750 members, shadowing its "heavyweight" adversaries, investor-owned electric utilities (IOUs).

States Approve RTP Tariffs

Regulators in Minnesota and Pennsylvania have approved electric service tariffs with real-time pricing (RTP). In Minnesota, the PUC directed Otter Tail Power Co. to offer large-volume customers: 1) a customer-specific baseline load priced at a standard rate, with deviations priced hourly at the spot market, reflecting a profit margin plus marginal operating and outage costs; and 2) a simplified offer that eliminates the baseline calculation, increases fixed charges, and bills all energy use at the real-time incremental rate.

Ohio Issues Rules for Interruptible Electric Service

The Ohio Public Utilities Commission (PUC) has OK'd final guidelines for interruptible (IT) electric service, with rules for pricing service options, returning to firm service, and obtaining replacement power so that customers can "buy through" interruptions.

The PUC stressed that new IT tariffs should not guarantee reentry to firm service prior to the expiration of a stated notice period. Utilities must use best efforts to provide replacement power in non-emergency situations and allow customers to specify a source of replacement power.

In Brief...

Sound bites from state and federal regulators.

Primergy Merger. Michigan regulators have OK'd the merger between Wisconsin Electric Power Co. and Northern States Power Co. The settlement assumes about 2 percent in cost savings on combined Michigan revenues, and imposes a four-year moratorium on rate hikes. Case No. U-10913, April 10, 1996 (Mich.P.S.C.).

Gas Pipeline Certification. Michigan certifies Thunder Bay Pipeline Co., L.L.C.