Calendar of Events

Sep 08, 2014 to Sep 10, 2014 | Chicago, IL
Sep 29, 2014 to Oct 03, 2014 | Michigan State University, Lansing MI
Oct 01, 2014 to Oct 03, 2014 | Washington, DC

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Public Utilities Reports

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Merchant Power: When Hedging and Profits Collide

Does too much risk management mean leaving money on the table?

Andy Dunn

Why do energy merchants or those utilities with merchant power divisions obsess over “selling” their upside? These companies feel compelled to show steady, predictable profit streams to both the street and their stakeholders, despite the fact that they operate within one of the most volatile markets in the world. Typically, their method of achieving earnings consistency centers on the execution of complicated purchase and sales agreements that effectively lock in the price of fuel and electricity. Don’t these contracts really just eliminate the potential positive return an energy merchant strives to achieve in the first place?

Proving Intent to Manipulate Markets

Should FERC look to all Securities and Exchange Commission precedent for a model?

J. Michel Marcoux

New regulations from FERC to prevent energy industry market manipulation take deep root in securities industry law. Modeled in part on the Securities Exchange Act of 1934 (Exchange Act), the Energy Policy Act of 2005 (EPACT) outlaws direct or indirect use or employment of manipulative or deceptive devices or contrivances in energy industries FERC regulates under the Natural Gas Act (NGA), the Natural Gas Policy Act of 1978 (NGPA), and the Federal Power Act (FPA).

Deregulation for Real

High power bills, with the lifting of rate freezes, give pause to politicians.
By Richard Stavros, Executive Editor

The Baltimore Sun recently carried a very poignant letter from one of its local readers— a letter that utility executives might well take to heart. Appearing under the title, “Energy Advice Cruel to Poorer Readers,” the letter took offense at an article that trivialized the effect of the huge increase in local electric bills (35 to 72 percent) expected this July with the lifting of a long-standing retail rate freeze.

A Constellation Of Risks

Will the deal with FPL serve the best interests of ratepayers? 

Richard Stavros, Executive Editor

Even as many hope that repeal of the Public Utility Holding Company Act (PUHCA) will lead to more efficient and rational corporate structures, they also fear that repeal could foster irrational exuberance, with mergers that fail spectacularly. Maybe that explains why every new utility merger announcement is being met with a much higher level of scrutiny than in past decades.

Rising Unit Costs & Credit Quality: Warning Signals

With increasing unit costs, the financial prospects and credit outlook for many utilities will depend on their success in passing along such costs to consumers.

Ellen Lapson

The utility sector still has excellent access to the capital and credit markets. Yet, it is never safe to assume utilities will continue to enjoy the same low costs of capital. This is particularly true for companies facing compressed margins, regulatory deferrals or disallowances, and rising debt leverage.

Rate Shock: A Matter of If, or When?

Robert Zabors

In the near future, the majority of investor-owned electric utilities will request, and ultimately win, rate increases. What can utilities do to alter consumer perceptions of higher bills?

Total Shareholder Return: Planning a Future Perfect

Total shareholder return can not only be a measure of past performance, but it can be harnessed as the prime touchstone for planning future performance.

Tim Gardner and Eric Spiegel

TSR is a paradox among financial metrics—dominant in assessments of past performance yet peripheral in plans for future performance. This paradox can be resolved.

Business & Money

Presenting a new management model.

Jim Morris

Utility companies are at a crossroads when it comes to managing their pension plans. They must determine the best ways to continue to offer this benefit while controlling the impact these plans have on the overall financial health of the organization.

Return on Equity: Gen Sector Issues

Ratemaking Special: A survey of recent retail rate cases for electric and gas utilities.

Phillip S. Cross

The results of annual survey of rates of return on equity authorized for major electric and natural-gas utilities—based on a sample of the retail rate cases conducted by state public utility commissions—show a vibrant and perhaps growing interest in traditional rate-of-return regulation.

CFOs Speak Out: Looking Beyond Power

Chief financial officers discuss new strategies and the possibility of further convergence inside and outside the energy industry.

Richard Stavros

A whole new cast of characters is expected to enter the energy industry—overseas ventures, telecom firms, insurance companies, and financial-services groups. But even as the future seems to hold boundless opportunity, utility executives and industry experts continue to disagree on what sort of consolidation is right.

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