New York Public Service Commission

Orange & Rockland Utilities Inc. and Central Hudson Gas and Electric Corp. have submitted their restructuring plans to the New York Public Service Commission as part of the commission's efforts to develop a new framework for the electric industry in the state's "Competitive Opportunities" proceeding.

Orange & Rockland's four-year proposal would reduce overall rates by $37 million (Case 97034/ 96E0900). Industrial customers would pay an average electric price of 6 cents per kilowatt-hour.

A controversial electric restructuring settlement proposed by Consolidated Edison Company of New York to the New York Public Service Commission, which includes a 25-percent rate cut for some industrial customers, was attacked as hostile to small customers.

ConEd filed the plan in response to the PSC's efforts to develop a new framework for the state's electric industry in its "Competitive Opportunities" proceeding (Case 97018/96EO897). ConEd's proposed five-year plan would run through March 31, 2002 and cut rates by $655 million.

Proposal Details.

The New York Public Service Commission has authorized Brooklyn Union Gas Co., to amend its existing business-incentive and area-development rate programs.

Brooklyn Union provides rate reductions for new or expanding businesses in 26 specified regions under the area-development program. It also has provided similar benefits for new or expanding businesses under a system-wide, business-incentive rate program.

As part of its ongoing efforts to reform the state's electric utility industry, the New York Public Service Commission has approved a multi-utility, retail-access pilot program for commercial farms and food processors.

Dairylea Cooperative Inc., an agricultural cooperative with 3,500 members and affiliates in the state, submitted the proposal, one of six received by the commission under its recent restructuring initiative.

Regulators in Maine, Vermont and New York have approved the proposed merger of two of the country's largest local exchange carriers, NYNEX and Bell Atlantic Corp.

All three states imposed similar conditions on their approval designed to protect the interests of ratepayers in the region. The conditions also address concern over how the merger might affect competition in the local exchange market, a high-profile regulatory effort already under way in each state.

Vermont and Maine.

The New York Public Service Commission has adopted eligibility criteria rules for competitive retail energy services companies (ESCOs) seeking to sell electricity in the state.

The state created the March 5 ESCO rules as part of New York's "Competitive Opportunities" proceeding. The rules are consistent with the PSC's May 16, 1996 decision to open markets to wholesale competition in 1997 and to retail competition in 1998. Consumer protections used in the present monopoly environment will be retained during the transition to competition.

While approving a

three-year settlement on electric rates for Niagara Mohawk Power Corp., the New York Public Service Commission has accepted a highly controversial increase in minimum charges for low-use residential customers.

It also approved a plan to establish an

$11-million, ratepayer-supported fund to promote additional sales to large, alternate-fuel customers, but warned the company that the court would closely monitor relations between the utility and its energy marketing affiliate, Plum Street Energy Marketing.

The New York Public Service Commission on Feb. 12 pushed toward competition by approving a multi-utility pilot program for electric retail access for commercial farms and food processors, and by allowing utilities to use their flexible-rate programs to compete against economic-development power offered by the New York Power Authority (Docket 97012/94EO385).

The Dairylea farming cooperative had asked the commission to approve a pilot open to commercial farms and food processors, except those that already have flexible rate contracts. The PSC agreed.

Concerned that competition in the natural gas market might affect reliability of gas supply for core customers, the New York Public Service Commission has adopted new short-term curtailment procedures for the states natural gas local distribution companies.

According to the commission, the new procedures "recognize the restructured natural gas industry," and require that in the event of short-term interruptions or force majeure curtailment situations, the needs of core customers are met first.

My business, the natural gas industry, stands at a crossroads. Unbundling and deregulation permeate the market. The next three years will see the end of many fixed, long-term supply and transportation service contracts (em the closing of an era.

In fact, natural gas marks perhaps the last commodity traded on a major exchange that remains captive to such long-term contracts. The demise of such contracts will add flexibility to gas pricing and supply management.

This evolution will accelerate with a host of changes in the way gas moves in wholesale markets.