CalEnergy Company Inc. subsidiary CE Electric Inc. in mid-July appeared poised to take over New York State Electric & Gas Corp. But NYSEG fought the hostile takeover and won.
a new line. "Maybe even as high as 15 percent?"
Those numbers are not out of line if you look at natural gas pipelines, which are getting such rates, he added. "I think those are the hints we have gotten from FERC, but that remains to be seen" Schroeder added.
Schroeder said he wants readers to understand that consumers will still gain, in spite of those high returns.
First, Trans-Elect is buying those grid assets subject to three- to five-year rate freezes. Second, when Trans-Elect buys assets, it funds only 20 percent with equity-the rest is lower-cost debt. Third, the transmission component of an end-user's bill is very small.
"We are going to increase the ROE through savings and other things we do that might not show up on the bill at all. We might be able to do that under the umbrella that already is there," Schroeder added.
Certainly, he believes, the finished price of power will drop.
"And that is where I think the experiment comes together, [but] that is a ways down the road." A five- or maybe ten-year horizon, he predicted.
But for now, he warned, "We have broken the mold and we're trying to re-cast the debate."
So where is the next big deal?
Schroeder acknowledged he's got a few in the works. He's hitting the road this spring, in fact, but not to Calgary, Michigan, or Los Angeles.
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