Retail Risk-Based Pricing
A new approach to rate design.
Customers with greater risk require greater working capital set-asides to address anomalous or unexpected events.
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Electric Reliability: The Merger Solution
Can economies of scale make the industry more stable?
Utility mergers create exceptional efficiencies, yielding average cost savings of approximately 5 to 10 percent of the combined company’s non-fuel operating expenses. These substantial untapped cost efficiencies could be harvested through more merger-friendly state regulatory policies that would enable utilities to retain these merger cost savings so long as a significant portion was channeled toward infrastructure investment.
Plants for Sale: Pricing the New Wave
Financial players and load-serving utilities are looking for power asset deals.
Approximately 60 generation asset sales have been announced in the past two years, and future transaction activity is likely to accelerate. Who are the players, and where might the available plants be located?
Taking Utilities Private: Return of the Barbarians
Experts debate whether KKR's leveraged buyout of UniSource Energy is right for the industry.
“From a public policy standpoint, should a utility that provides a vital public good be owned by a private group that gains ownership by taking on a high degree of debt (risk)?” Mark T. Williams, executive-in-residence at the Finance & Economics Department at Boston University, identifies the quintessential issue that will no doubt be heatedly debated in boardrooms and commissions as more utility CEOs are tempted to become private utilities through a leveraged buyout transaction.
And tempted they will be.
The Utility Sector: A Wall Street Takeover?
Financial players bring credit depth to energy markets, but will they play by the rules?
The center of gravity for energy marketing and trading is moving from Houston to Wall Street. Who’s in, who’s out, and who’s testing the waters?
Generation Roundtable: Power Flux
Generators struggle to plan for the future as they cope with an unstable present.
In a roundtable discussion, generation experts explain how environmental regulations, industry restructuring, investor confidence, and the bottom line are affecting their decision-making.
Utility Money Pools: Cause for a Downgrade?
FERC's ruling on cash management programs will introduce new transparency into how utilities manage their cash.
On Oct. 22, FERC ruled that FERC-regulated entities must file their cash management agreements with the commission and notify the commission when their proprietary capital ratio drops below 30 percent, and when it subsequently returns to or exceeds 30 percent. FERC’s ruling comes in response to analysis that found “severe record keeping deficiencies” by some FERC-regulated entities. This problem has led credit rating agencies like Fitch Ratings to warn that consolidated cash management accounts and failure to document fund transfers among affiliated companies as intercompany loans could be factors contributing to a U.S. bankruptcy court’s decision to consolidate a solvent company in the bankruptcy proceeding of its affiliate.
Energy Trading: What's Your Position?
Obtaining a position measurement in energy markets has become more complex and has increased financial risks for integrated utilities.
"What's your position?" The answer to that simple question in today's energy markets is anything but simple. In fact, answering this question may be the single most difficult challenge faced by a fully integrated energy firm in its efforts to manage risk.
Letters to the Editor
Two letters, one correction
Jonathan Jacobs, Managing Consultant at PA Consulting Group, responds to a letter to the editor in the Oct. 1, 2003 issue from Lewis Evans and Kevin Counsell. And former FERC commissioner Matthew Holden Jr. disagrees with John Sillin's commentary in "The Blackout of 2003: Why We Fell Into the Heart of Darkness" in the Sept. 15, 2003 issue.
The Finance Forum: Growth in a Back-to-Basics World
Financial experts discuss the ongoing recovery in the power industry, and whether better times will live up to investor expectations.
Chief financial officers from Southern Co., FPL, TXU, and Northeast Utilities, and the chief executive officer of Aquila discuss their corporate growth strategies in the context of a more conservative utility environment, and an improvement in the economy.