(January 2007) PNGC Power promoted Tom Haymaker to vice president of power supply. Calpine Corp. announced that Larry B. Leverett joined the company as senior vice president, gas trading. ITC Holdings Corp. announced that William J. Museler has been appointed to its board of directors. Sierra Pacific Resources announced that William D. Rogers has been named to the new position of vice president, finance and risk, and Corporate Treasurer. And others...

Major transmission projects based on two distinct models are showing signs of life. What can these projects teach us about future transmission investment?

To better understand the performance of the electric utility sector from both a short-term and long-term perspective, we examined the total shareholder return (TSR)—dividends plus change in stock price—of 58 electric companies for 2005 and for three- and five-year periods. We grouped these companies into four categories to better understand the impact of alternative strategies on investor performance: Recovering, Traditionalist, Growth, and Merger.

FERC proposed a new set of regulations, under the new section 219 of the Federal Power Act, explaining in broad outline how it might approve generous financial incentives for new investments in transmission—incentives once dubbed as “candy.” As of mid-January, the new NOPR had spawned more industry comment than just about any other FERC proposal in recent memory.

(January 2006) Kathleen Chagnon joined Saul Ewing LLP as a partner in its business department. Sierra Pacific Resources announced that Donald D. Snyder was elected to its board of directors. Avista Corp. named Linda M. Jones director of corporate communications. Allegheny Energy Inc. named Loyd (Aldie) Warnock vice president, external affairs. And others...

The past year has allowed the North American power sector to continue its recovery, but it has been a treacherous time for investing. Asset values, and the value of their associated debt instruments, are being driven in the short term by an extreme fuel market and in the long term by a back-to-basics mindset among electric utilities. Still, asset valuations in most markets are not yet at replacement costs, leaving current investors with a residual level of risk.

(September 2005) Top honors in our first annual financial ranking go to those staying with the basics and to those dealing with soaring commodity prices.

THE CEO POWER FORUM

TXU's Wilder nets $55 million package.

Power and utility companies had a good year in 2004, as did their investors. Energy stocks broke away from the pack during the second half of the year and ended up doubling the performance of the overall market (). This marks the second consecutive year of positive returns for the SNL Energy Index; however, in 2003 the index underperformed the broader market.

AN EXPENSIVE EXPERIMENT?

Dollars and Sense

Financial data raises doubts about whether deregulation benefits outweigh costs.

This year, U.S. electricity consumers will spend more than $1 billion financing the operation of six regional transmission organizations (RTOs).¹ RTO costs have nearly doubled since 2001 and now outweigh nearly all of the benefits anticipated by the national cost-benefit studies.

Business & Money

Winners and Losers:

Diversified companies lead (and the globals lag) over the past five years.

The unbundling of services and companies in the electricity and natural gas industries have created unprecedented opportunities to reinvent the traditional integrated utility model, with a broader array of attendant risks and rewards. But this past year was clearly one of retrenchment and strategic soul searching, allowing an opportunity to re-examine the sector for winning business formulas.