LICAP and Its Lessons:
Doubts intensify over New England's radical new market for electric capacity.
witnesses are dealing in mere speculation.
In fact, the hard evidence argues that markets love Edison. On Oct. 14, 1999, the Wall Street Journal ran a favorable story: "Edison International Reports 21 percent Rise in Earnings and Predicts Solid Growth." That followed a series of favorable financial reports from EIX CEO John Bryson. Two weeks earlier, on Oct. 1, Lehman Bros. had upgraded EIX stock to a "buy." Further, in late September, Duff & Phelps Credit Rating Co. had assigned an "A+" rating for certain EIX debt.
This case should provide a litmus test for Curt Hébert's argument that a utility faces higher investment risk when it retreats to a wires-only franchise. It offers the chance to make real policy - the sort of commitment that was missing from Order 2000. But it also revives Commissioner Stalon's old dilemma. Should a regulator sit as a trier of fact or make policy based on his presumed expertise? The reply briefs came in on the first of December. If the argument is valid that RTOs deserve a financial inventive, then here in this case it must carry the day. To prevail, Hébert must convince his colleagues to move beyond the evidence and make policy by intuition.
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