Repealed

A judge in West Virginia has struck down the city of Morgantown’s ordinance banning hydraulic fracturing (fracking), ruling that the state Department of Environmental Protection (DEP) has exclusive dominion over the regulation of natural gas drilling.

Oregon Gov. John Kitzhaber signed a bill (SB 967) that repealed a controversial law (SB 408) passed six years ago requiring annual state regulatory adjustments to align retail utility rates with the actual amounts of taxes paid by the state’s four major investor-owned utilities. NW Natural, the gas-only utility distribution company based in Portland, said it has had a surcharge in place every year that the tax true-up law has been in existence. As a result of the new law being effective immediately, NW Natural said it will be denied recovery of its surcharge for the 2010 tax year. The gas utility said it is now required to record a one-time pre-tax charge to earnings in the second quarter this year of approximately $7.4 million ($4.4 million, or 17 cents/share, after tax) related to amounts earned from the surcharge last year. The original law grew out of a concern that utilities were collecting more in taxes as part of customer rates than they were paying out to governments (see Daily GPI, April 15, 2008).

The removal of investment restrictions when the Public Utility Holding Company Act of 1935 (PUHCA) is officially repealed in February must not “become a new impetus or justification for continuing the era of adversarial relationships between the utility sector and state or federal regulators,” David Sokol, chairman of MidAmerican Energy Holdings Co., said last Tuesday. “It absolutely is past time for all of us to work together to meet tomorrow’s challenges in this sector.”