Public Service Electric and Gas

Expressing concern about price volatility in the natural gas market, New Jersey, Virginia and Michigan regulators have directed local gas distribution companies to try fixed-price contracts and other hedging instruments. This would allay risk in wholesale gas supply portfolios and protect residential ratepayers from price swings common in the winter heating season, regulators said.

The growing popularity of fixed-price and other financial instruments to hedge against price spikes follows two winters of volatility noticed by regulators nationwide.

New Jersey.

Sound bites from state and federal regulators.

Electric Exit Fees. New Jersey board exempts General Motors Corp. from any exit fees imposed in the future to collect electric utilities' stranded costs, in connection with GM's plans to build a $2.2-million gas-fired cogeneration facility (PURPA-qualified) at its Linden auto assembly plant. GM said it had checked all laws and regulations and had found no current obligation to pay exit fees. Docket No. ET96090669, June 24, 1997 (N.J.B.P.U.).

Residential Gas Rates. Arkansas OKs settlement allowing Arkansas Oklahoma Gas Corp.

Locational marginal pricing, even if "complex," is well worth the benefits.

In two recent issues, PUBLIC UTILITIES FORTNIGHTLY featured editorials %n1%n on restructuring of the PJM Pool. Those two articles described proposals by the so-called supporting companies, %n2%n seven members of the Pennsylvania-New Jersey-Maryland Interconnection, to use a "locational marginal pricing" model for congestion pricing for electric transmission and to continue PJM as a "tight" power pool.

The New Jersey Board of Public Utilities has authorized Public Service Electric and Gas Co. to extend its existing economic development programs through July 1999.

The programs include construction and building credits for non-residential consumers who expand into newly leased or purchased vacant building space and increase their electric or gas energy use as a result. The program also includes an electric, off-peak employment service for non-residential customers that increase consumption of off-peak electricity as a result of increased employment levels.

My electric company, Potomac Electric Power Co., has announced a joint venture with RCN Corp. of Princeton, N.J., to offer local and long-distance telephone service to callers in Washington, D.C., and nearby areas, plus cable television and high-speed connections to the Internet. With stockholder money, PEPCO would compete head-on against Bell Atlantic, which won approval from the Federal Communications Commission on Aug. 14 for its $25-billion merger with NYNEX.

Reporting the story, The Washington Post quoted PEPCO President John M.

The Nuclear Regulatory Commission staff has identified 13 nuclear plants that warrant increased NRC regulatory attention. These plants will remain on the NRC "watch list."

No additional nuclear plants were added to the NRC watch list. But one plant - Indian Point 3, operated by the New York Power Authority - was removed from the list. Indian Point 3 had been placed on the list in June 1993, and now has been removed due to improved performance.

Sound bites from state and federal regulators.

Overseas Investment. Michigan certifies plan by Consumers Electric and Gas Co. to bid on the outstanding equity of three electric distribution companies being privatized in Buenos Aires, Argentina. Case No. U-11331, April 14, 1997 (Mi.P.S.C.).

Appliance Repair Rates. New Jersey OKs rates for Public Service Electric and Gas Co.

Edison International elected former U.S. Secretary of State Warren Christopher to its board and its utility company's board, Southern California Edison. Christopher was elected chair of the executive committees of both boards. Howard P. Allen retired as chair and CEO.

John T. Coughlin, former Wisconsin Public Service commissioner, was elected chair of the PJM Interconnection L.L.C.

Former U.S. Department of State Legal Adviser Conrad K. Harper was elected to the board of both Public Service Enterprise Group Inc., and Public Service Electric and Gas Co.

Sound bites from state and federal regulators.

Gas Curtailment. New York PSC approves updated curtailment and interruption tariffs for many of the state's natural gas local distribution companies. It had asked the LDCs to develop new rules to reflect growing competition and ensure gas deliveries for core customers during a supply crunch. Case 93-G-0932, March 24, 1997 (N.Y.P.S.C.).

T & D Classification. New York PSC opens proceeding to distinguish between electric transmission and distribution facilities.

Citing concerns about gas price volatility, the New Jersey Board of Public Utilities has ruled that Public Service Electric and Gas Co. should maintain its existing annual fuel cost adjustment mechanism rather than shift to a monthly charge as originally proposed for its local gas distribution customers.

Under a settlement approved by the board, the LDC will have the option to impose the monthly charge on its general-service and large-volume customers.