Frontlines

Fortnightly Magazine - November 1 1997
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THE POSSIBILITIES ARE ENDLESS," SO THE ADS SAY.

But what about a hostile bailout? I wouldn't have believed it myself until the news arrived, forcing me to rewrite this column at press time.

Imagine: Enron offering to reimburse PECO Energy for $5.4 billion in stranded costs, while taking on the role as the electricity provider of last resort for southeast Pennsylvania.

No doubt you have already read a half-dozen news stories about Enron's play for PECO. The details should sound familiar; the Philly papers were filled with lively quotes. On Oct. 8, Enron Energy Services Power Inc. filed a petition with the Pennsylvania Public Utility Commission with an alternative plan for retail choice. PECO had submitted a settlement agreement on Aug. 27, more than a month earlier. It had offered what it then believed to be the largest rate reduction promised by "any electric utility in the country." Enron, however, claimed that its plan would introduce competition more quickly. It alleged PECO's proposal would exert a "chilling effect," actually discouraging PECO customers from switching to new competitors.

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