The decision to limit mercury provides cover for utilities reluctant to spend on controlling NOx and SO2, while boosting other companies
Old Age Warrants Facelift for Stranded Costs
by ease of execution, a utility might consider a competitive bid for or negotiated sale of 1) its entire power purchase portfolio, followed by 2) its generating plant operations and maintenance function, and ending with 3) the outright sale of generating plant. The first to let go will reap the great- est value; the last the least. And those who don't may see their stock languish over the next few years.
In fact, future valuation is rarely this simple. Unforeseen factors will alter this predictive model. Suffice to say, however, that a significant portion of the industry is leaning toward generation as a stock price panacea at a time when true value may be produced by exiting generation. t
David P. Wagener is director of the Global Power Group at Salomon Brothers Inc., New York, NY.
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