1995 Highlights

Summer Heat Wave Produces Record Demand
The prolonged summer heat wave resulted in numerous successive peak load records and curtailments to industry by some utilities. This prompted the Louisiana Public Service Commission (LPSC) to question the adequacy of the utilities' reserve capacity. LPSC Chairman John Schwegmann has asked for reports from all Louisiana electric utilities on their capacity, reserves, and plans for additional plant construction.

LPSC Considering Mandated Wheeling
In July the LPSC opened a generic investigation into requiring the utilities to open their electricity distribution system to wholesale and retail wheeling. The refusal by Louisiana Power & Light Company (LP&L) of a request by Calciner Industries in May to wheel power from their cogeneration facility in Chalmette to their Gramercy and Norco plants prompted the investigation. Calciner is asking the LPSC to order LP&L to wheel the power.

Bankruptcy Judge Appointed to Oversee Cajun Bankruptcy
On August 23 a federal judge approved the appointment of a bankruptcy judge to oversee the bankruptcy of Cajun Electric Cooperative, Inc. On December 21, 1994, Cajun filed for Chapter 11 bankruptcy after the LPSC ordered a $30.2 million annual reduction in its wholesale rates because its investment in the River Bend nuclear plant was not considered "used and useful". Cajun owes $4.2 billion to the federal government's Rural Utilities Service agency and said the reduced rate made the repayment impossible.

CLECO Co-op Acquisitions Complicated by Cajun Bankuptcy and Justice Department
On March 11 Teche Electric Co-op members voted to be acquired by the Central Louisiana Electric Company (CLECO), but in a similar vote on May 7 by Washington - St. Tammany Electric Co-op members, CLECO's buyout proposal was rejected. CLECO has begun negotiations with Cajun regarding its power supply contract with Teche, but the ongoing bankruptcy proceedings are complicating the situation. Furthermore, the U.S. Justice Department is looking into CLECO's attempts to purchase the two co-ops in a probe into whether the company violated antitrust laws.

Red River Hydroelectric Power Study OK'd
On August 1 the Federal Energy Regulatory Commission granted preliminary permits allowing the Red River Waterway Commission to explore the idea of building hydroelectric stations at each of the project's five locks and dams. The Commission is presently assessing the demand for the power that would be generated before seeking a consultant to study the economic feasibility at each dam. A previous study for Lock and Dam No. 3 found that it could generate enough electricity over 30 years to pay for the entire navigation project if a customer for the power could be found. A 1986 cost estimate to build one 31.5 Megawatt plant was $50-60 million.

LPSC Completes Earnings Review of GSU and LP&L; CLECO and SWEPCO Next
In 1994 the LPSC began reviewing the earnings of each investor-owned utility to determine if its allowable rate of return on equity is higher than it should be. The completed reviews of GSU and LP&L resulted in orders to reduce both utilities' base revenues. GSU's ordered reduction was $12.7 million, of which $4.4 million has been implemented. GSU has appealed $8.3 million of the reduction. LP&L's order was for $49.4 million, of which $34.7 million has implemented. LP&L has filed for an injunction to stay $14.7 million of an additional reduction of "Imputed Revenues".

The LPSC has just begun reviewing CLECO's earnings and plans to start on SWEPCO (Southwestern Electric Power Company) in the spring of 1996.

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