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GULF STATES UTILITIES COMPANY MAKES ANNOUNCEMENT

 BEAUMONT, Texas, April 26 /PRNewswire/ -- The Public Utility Commission of Texas could act at its May 19 meeting on a hearing examiner's recommendation that Gulf States Utilities Co. lower the fixed fuel factor that is a major component of electric bills and refund $26.3 million in over-recovered fuel costs, plus interest, to the company's 295,000 Texas customers.
 Administrative Law Judge Beth Bierman is recommending a new fuel factor of 1.8545 cents per kilowatt-hour. The fixed fuel factor now in place is about 2.1 cents per kwh. GSU had requested a factor of 2.02 cents.
 If the commission follows the examiner's recommendation, GSU would give customers a one-time credit on bills for the difference between actual and estimated fuel costs for the period from Oct. 1, 1988, through Sept. 30, 1991. If the refund is made in July, the interest would amount to $7.9 million for a total of $34.2 million.
 Bierman is also recommending the PUCT reject Gulf States' application to have certain purchased power costs associated with a venture near Lake Charles, La., passed through to customers. She said in her report that only those fuel costs associated with the Nelson Industrial Steam Co. (NISCO) partnership that are below "avoided cost" -- the cost per kilowatt-hour the company avoids by not having to build new generating facilities -- should be included in customer bills.
 Gulf states has always collected from Texas customers only the avoided cost portion of the electricity bought form NISCO.
 Gulf States provided two power plants and the three large industrial partners who were considering cogeneration converted the boilers to burn low-cost petroleum coke. GSU operates the venture and buys all the electricity. Some of the industrial partners purchase the steam.
 The PUCT had ruled in an earlier case that GSU could collect no more than the avoided costs for electricity bought from NISCO. However, the Texas Supreme Court in 1991 overturned that decision and said the PUCT could allow GSU to recover the contracted costs if the company could show the payments are a reasonable and necessary expense. That is what the company attempted to do in this case.
 The report did say GSU should be allowed to collect fuel costs associated with the Spindletop Gas Storage Project in Beaumont.
 -0- 4/26/93
 /CONTACT: Doug McCormick of Gulf States Utilities Company, 409-839-2858/
 (GSU)


CO: Gulf States Utilities Company ST: Texas IN: UTI SU:

SM -- NY058 -- 0627 04/26/93 11:12 EDT
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Date:Apr 26, 1993
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