[BETA] Fortnightly

CONSUMER FRAUD. The National Association of Attorneys

General, meeting Nov. 18 in Washington, D.C., to discuss electric restructuring, issued a warning to electric consumers on fraudulent schemes and abusive practices by scam artists. The warning encourages consumers to check their electric bills for unusual provider names or charges, and to avoid participating in contests that require a signature that can be used to switch an account.

RATE REDUCTION BONDS. A new report from Fitch Investors

Service, California Direct Access Customer Plan, highlighted the credit implications for utility distribution companies and investors in the rate reduction bonds to be issued by special trusts of the California Infrastructure and Economic Development Bank. Fitch said that on balance, the mechanisms offer satisfactory protection for the credit of the companies and potential rate-reduction bondholders. About $6.2 billion of bonds have been issued for the state's largest IOUs: Southern California Edison, Pacific Gas and Electric, and San Diego Gas and Electric.

STRANDED COSTS. Government should help electric utilities

recover stranded costs, according to a new report released Nov. 18 by the Edison Electric Institute, since government allowed utilities to accumulate sunk costs and inefficiencies incompatible with a competitive regime. In their report, The Path of Least Resistance: Accelerating the Movement to Electric Industry Competition Through Transition Cost Compensation, authors Philip R. O'Connor and John L. Domagalski of Coopers and Lybrand argue that policymakers have long recognized a need to recover transition costs in deregulating other "network" industries, such as airlines, railroads, trucking, telecommunications and natural gas.

Congress

PUBLIC POWER FINANCING. Sen. Frank Murkowski, chairman

of the Senate Energy Committee, introduced a bill allowing municipal utilities to participate in open-access programs without violating "private-use" restrictions and thus jeopardizing the tax-exempt status of tax-exempt bonds already issued. Participating munis would forego any future tax-exempt financing, and could retire outstanding bonds subject to private-use restrictions over an extended period.

NUCLEAR WASTE BILL. The U.S. House of Representatives

voted 307-to-120 to pass the Nuclear Waste Policy Act of 1997, which authorizes a central temporary storage facility for the nation's high-level nuclear waste. The bill puts temporary storage and permanent waste disposal programs on sound financial footing by funding the programs directly from electric consumers. The Senate passed companion legislation in April. The bill cannot be passed until Congress returns from its recess this month.

Mergers & Acquisitions

LILCO "BAILOUT." The Citizens Advisory Panel and NYPIRG

filed a petition with the New York State Supreme Court in Albany claiming that the Public Authorities Control Board violated state law on July 16 when it approved a partial takeover of Long Island Lighting Co. by the state-run Long Island Power Authority without conducting an environmental review. The groups called the takeover a "bailout" plan at the expense of ratepayers, noting that LIPA would finance the takeover through $7.3 billion of tax-exempt bonds. The PACB is a little-known state agency made up of representatives from the Office of the Governor and leaders of the state Assembly and Senate.

CO-OPTING" PSNH. New Hampshire Electric Cooperative

Inc. on Nov. 12 offered to buy the transmission and distribution