adversaries. If he were a boxer, his name might be Alan "The Right" Richardson.
The executive director of the American Public Power Association (APPA) always toes the canvas, swinging for equity for his 1,750 members, shadowing its "heavyweight" adversaries, investor-owned electric utilities (IOUs).
The Federal Energy Regulatory Commission (FERC) has issued its rehearing order for Great Lakes Gas Transmission Ltd. Partnership (GLGT), upholding its July 26, 1995, order allowing GLGT to roll in the costs of expanding its natural gas pipeline facilities (Docket Nos. RP91-143-030 et al.).
The July 26 order was issued on remand from the U.S. Court of Appeals for the D.C. Circuit, reversing a 1991 order allowing incremental pricing. The case arose when GLGT spent over $700 million to expand its pipeline system.
The Montana Public Service Commission (PSC) has authorized Montana-Dakota Utilities Co., a natural gas local distribution company (LDC), to increase rates by $1.008 million. The increase includes an allowance for return on common equity of 12 percent. The PSC permitted the new rates to enable the LDC to recover the entire nongas cost increase from the residential customer class. It refused, however, to approve rate rebalancing to shift an additional $1.5 million of revenue requirement to the residential class without a thorough study of both gas and nongas costs.
"This is not an intent to strip away consumer protection," Sen. Alfonse M.
D'Amato (R-NY) told
a Senate panel about S. 1317, a bipartisan bill to repeal the Public Utility Holding Company Act (PUHCA).
D'Amato, chair of the Senate Banking, Housing and Urban Affairs Committee, received nods from federal and state regulators at the June 6 hearing, although each voiced reservations. Three utility chiefs spoke in favor of the legislation.
A few utility executives claim to sleep untroubled by the future of their companies. Most, however, admit to some tossing and turning engendered by concern over competition and the complacency of coworkers.
What, if anything, are they doing about it?
A survey of 117 PUBLIC UTILITIES FORTNIGHTLY subscribers reveals that American utility executives are asking themselves all the tough questions about the future of their operations. It also reveals a widespread sense of urgency in the search for answers.
The secret lies in gaining exclusive-use rights to protect your product or process from your competitors.
The electric utility industry is inherently a high-technology business. Those who ignore this fact for long will fall behind (em not only in using the technology, but also in contending against their higher-tech competitors.
Many executives of publicly held utility corporations have written severance agreements to protect them in the event of a change in control. However, these severance packages remain vulnerable to attack by acquirers.
Two separate threats are emerging. One involves a direct attack on drafting flaws in the plan documents. The other, more subtle, threat lies in the impact and interpretation of the special "Golden Parachute" rules under the Internal Revenue Code. This second threat warrants attention.
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