PECO

Pennsylvania Administrative Law Judge Louis Cocheres has recommended that the Public Utility Commission should deny a request by PECO Energy Co. to recover stranded costs from ratepayers through a surcharge over 10 years.

Pennsylvania State Sen. Vincent Fumo (D) had intervened in the proceeding against PECO's request. Fumo claims the ruling is significant because it points out that customers should not receive the financial benefits of deregulation if PECO is allowed to impose the surcharge.

"Although the final decision is still in the hands of the commission ...

More than a decade ago, working at the energy laboratory at the Massachusetts Institute of Technology, the late Fred Schweppe devised a novel scheme for pricing electric transmission. His solution? Do nothing. Simply ignore transmission.

Investor-owned utilities in Pennsylvania have filed their retail electric competition plans with the Pennsylvania Public Utility Commission to comply with recent legislation requiring customer-choice pilots for 5 percent of the peak load of the state's electric utilities.

PECO Energy Co. has filed a proposed electric choice retail pilot program that would allow about 90,000 residential, commercial and industrial customers to choose their electric suppliers as soon as October and no later than January 1998.

The Pennsylvania Public Utility Commission has refused to issue its 1996 report card of the state's electric, telephone, natural gas and water utilities. The reports usually are issued on an annual basis to little fanfare, but with the advent of varying degrees of competition, the commissioners have disagreed over the amount of performance information that should be released.

According to an article in the Philadelphia Inquirer, the controversy began when PUC Commissioner Robert Bloom wanted sections of the report removed that could cause discomfort to some utilities.

The Pennsylvania Public Utilities Commission has approved final guidelines for electric utility pilot programs for Pennsylvania's transition to a competitive retail electric generating market. The pilots will allow a limited number of residential, commercial and industrial customers to choose their electric suppliers.

The "Electricity Generation Customer Choice and Competition Act," signed into law by Gov. Tom Ridge Dec. 3, 1996, requires participation in the pilots by customers representing 5 percent of a utility's peak load for each customer class.

In a unique agreement with two of its largest industrial customers, PECO Energy Co. has purchased USX Corp.'s Fairless Works power plant in Bucks County, Pa. The plant will burn landfill gas purchased from Waste Management Inc., which owns two nearby landfills.

The Fairless Works site hosts the sheet- and tin-finishing operations of the U.S. Steel Group of USX Corp., along with several other industrial plants. PECO now will own the USX power house with two steam turbine generators, which produce up to 60 MW of electricity and 200,000 pounds of steam per hour.

Un-American Activities

I would like to comment on Joseph Paquette's letter ("Stranded-cost Recovery: It's Constitutional," Mailbag, Oct. 1, 1996) responding to Charles Studness (Stranded-cost Recovery: It's Un-American," Financial News, July 15, 1996, p. 43).

Mr. Paquette suggests that denying recovery of stranded costs amounts to an unconstitutional taking of private property.

Despite a recent delay, the stage

appears set for online trading

in electric transmission capacity.

THIS IS ONLY A TEST (EM FOR NOW.

But come January, if all goes well, the OASIS program will start up in real time, with customers venturing onto the Internet to place reservations for capacity on the nation's electric transmission grid.

PECO Energy Co. has filed its "Open Market Plan" at the Federal Energy Regulatory Commission (FERC) for restructuring the Pennsylvania-New Jersey-Maryland (PJM) power pool. PECO is the only member not joining a majority PJM restructuring order filed July 24 with the FERC.

The plan proposes an independent system operator (ISO) and electric transmission service priced on a regional, postage-stamp basis. The wholesale market would be based on bilateral transactions, with a residual pool for hourly energy.

Whether you're a utility commissioner in Wyoming or Georgia, a v.p. for a leading marketer, or a commission division director in New Jersey, you share a common activity: learning by the seat of your pants about deregulating gas markets. In this gas forum, PUBLIC UTILITIES FORTNIGHTLY highlights developments across the nation.