Ask this question: Are Investors today earning what they thought they would, back when they last had faith in regulation?
As their customers discover more competitive prices, many utilities remain saddled with the costs of uneconomic plant and power purchase contracts approved under regulation. They seek compensation for these costs, but the amount deserves a close examination.
Some utilities seek remuneration that exceeds the market value of their common stock. Such a settlement seems overly generous for investors, who will continue to own their shares after the payoff.
A Contentious Bill Passes Senate (em Two Votes Shy of Blocking a Veto
Recently passed by the U.S. Senate, nuclear waste bill S. 104 lies mired in quicksand, facing a promised presidential veto, not to mention attacks from senators representing those states targeted for possible waste storage sites. Disposal of waste from the nation's nuclear generating plants has turned into possibly the most contentious issue on Capitol Hill.
Touted as a panacea for stranded costs, securitization would forever shield rates from market scrutiny.
We consumers display an amazing talent to squander the fruits of our labor on the whim of the moment. Examples might include bungee jumping, vanity license plates or pet rocks. Or just about anything you might find in a magazine stuffed in the back of an airline seat.
Now make way for electric utility restructuring, where the latest fashion calls for securitization of uneconomic costs.
The Federal Energy Regulatory Commission and the Maryland Public Service Commission have approved the merger of Baltimore Gas and Electric Co. and Potomac Electric Power Co. to form Constellation Energy Corp.
However, the stiff terms for approval (em including mandatory rate cuts (em have prompted the utilities to claim they might abandon the merger.
"When was the demise of the regulatory bargain? What you say is true, but at some point you had to know the bargain was over."
(em A state utility commissioner
"Beats me, it doesn't seem to be over yet. The electric industry still has a duty to serve all customers, and it must charge below-market rate confiscatory for many of our services because of the regulatory bargain.
Five utility companies have filed a lawsuit in U.S. District Court in Birmingham against the Tennessee Valley Authority to bar it from making sales to unauthorized third parties for resale outside TVA's service territory, claiming such sales violate the TVA Act.
"TVA is under more intense attack from private utilities than at any time in its history," said TVA Chair Craven Crowell at an April 15 at a meeting of the TVA Caucus in Washington, D.C.
Can NERC Juggle All Three En Route to Open Access?
At the year's start, the North American Electric Reliability Council decided to leave its "peer pressure" policy behind and require mandatory compliance with its reliability standards. As NERC grapples with its new policy, Public Utilities Fortnightly asked eight industry representatives how they might ensure reliability in a restructured electric industry.
It had taken time for NERC to arrive at this point, but itÆs official: Mandatory sanctions and business incentives will soon be used to enforce compliance.
Green Pricing. Michigan allows Detroit Edison Co. to expand its existing experimental photovoltaic "green pricing" program, finding current solar capacity fully subscribed, with a waiting list for new participants. Case No. U-10893, March 27 1997 (Mi.P.S.C.).
NUG Contracts. Virginia permits Delmarva Power & Light Co. to amend purchased power contract with Star Enterprises, its principal nonutility supplier, by suspending capacity supply and payment obligations through May 31, 2000. Case No.
More than a decade ago, working at the energy laboratory at the Massachusetts Institute of Technology, the late Fred Schweppe devised a novel scheme for pricing electric transmission. His solution? Do nothing. Simply ignore transmission.
The Missouri Public Service Commission has approved the merger of Union Electric Co. and CIPSCO Inc., if Union Electric meets certain requirements, such as helping to form an independent system operator for the region's transmission system.
The formation of the ISO must be consistent with guidelines established by the Federal Energy Regulatory Commission. The proposed merger will include the formation of a new entity, Ameren Corp., as a federally regulated public utility holding company.
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