Idaho Power (IP) has filed a notice of settlement with the Idaho Public Utilities Commission (PUC), its first step toward gaining approval to accelerate amortization of accumulated deferred investment tax credits (ADITC) when year-end return on equity (ROE) falls below 11.5 percent. If the PUC agrees, the agreement would remain in effect from 1995 through 1999.
In electric power, telecommunications, water, and natural gas, the costs of local distribution make up a significant share of the cost of providing services. For any network or system, the cost of distribution facilities is largely or entirely independent on usage; i.e., such costs are largely invariant to the number of phone calls, kilowatts, British thermal units (BTUs), or gallons that customers use.
IT has become strategic. And important. So important that utility companies are seeking outside expertise to help them leverage technology to conduct business more efficiently, help grow revenues, and hone their edge in the new competitive world. Time has become an unaffordable luxury.
The decision to outsource, however, now goes beyond cost-cutting considerations. Companies are just as likely to turn to outsourcing when they want to concentrate on new business opportunities or dramatically change their overall structure.
The Minnesota Public Utilities Commission (PUC) has authorized Northern Minnesota Utilities, a natural gas local distribution company (LDC), to insulate shareholders from the effects of losing a large firm sales customer by reallocating associated demand costs among remaining firm customer classes. It allowed the LDC to pass the increased costs through its purchased adjustment clause, finding that the utility was now alerted to the problem and had taken action to protect itself and its ratepayers from stranded costs caused by customers switching to interruptible transport service.
The Common Council of Salem, NJ, has voted to study the feasibility of creating a municipal electric system that would compete directly with Atlantic City Electric Co. (ACE), the city's present electricity supplier. The proposal under discussion would establish a new utility in Salem; the city would not condemn ACE facilities nor prohibit ACE from operating within city limits.
Over the next few months, Salem will review power-supply options, solicit statements of interest to supply electricity to the city, and examine transmission and distribution requirements.
Technological advances in electric generation and telecommunications make utility competition both possible and inevitable. These economic forces will eventually break down the regulatory structure of the electric industry. However, public policy should play a crucial role in molding and nurturing competition.In recent months, regulators in a majority of the states have opened proceedings to study electric competition.
The challenges facing the information technology (IT) industry into the next century are significant. Yet so are the opportunities.
Regulatory Commission (FERC) to approve a set of market-based rates for short-term firm transportation, interruptible transportation, temporary capacity release, and storage services (Docket No. RP95-408).
Citing a need to prepare for the emerging competitive marketplace, Central Illinois Light Co. has volunteered to experiment with direct access for all of its customers. The utility has asked the Illinois Commerce Commission to consider two separate pilot programs that will allow customers to purchase some or all of their power requirements from other suppliers.