Louis L. Rizzi and Eric W. Novak
In talking to electric utility managers from across the country we have found that most believe direct access will have major repercussions on all aspects of their business by the end of the decade. Not surprisingly, there is an emerging consensus that revenues will drop rapidly as supply options grow for retail customers.
William Townsend and Christopher Seiple
The Federal Energy Regulatory Commission (FERC) set in motion a new round of restructuring for the U.S. electric power industry when it issued its latest Notice of Proposed Rulemaking (NOPR).
Henry G. Heier
Gordon Canning's article, "Entering the Appliance Repair Business" (Feb. 1, 1995), contains several inaccuracies. First, Mr. Canning asserts that "the residential customer views the utility as a preferred provider." This is not a universal given. Residential customers only view a utility as a preferred provider of appliance service if the utility is allowed to engage in nonutility business activities and to subsidize these services below fair-market value.
Lori A. Burkhart
Fitch Investors Service has assigned competitive rankings to 60 of the nation's largest public power and investor-owned electric utilities (IOUs). The top three IOU slots in the Fitch Competitive Indicator (FCI) go to Duke Power Co., Potomac Edison Co., and Northern States Power Co.
Bruce W. Radford
This fight is for the heart and soul of regulation everywhere. The Federal Energy Regulatory Commission (FERC) won the first round on February 22, but I think there's more to come.
The fight involves incentives for nonutility generators (NUGs). It also touches on PURPA (em the Public Utility Regulatory Policies Act of 1978 (em which guarantees a market to cogenerators or power producers (QFs) who qualify. But more important, this battle involves regulatory philosophy.
W. Lynn Garner
After 40 years of wandering in the wilderness as a minority party, House Republicans are ready to slash and burn what they see as a bloated federal bureaucracy. The next two years will demonstrate just how powerful the legislative branch can be when both House and Senate are controlled by a strong-willed party on a mission. Electric industry officials seem optimistic, but cautious, about this Republican revolution.
Eugene P. Coyle
Eugene P. Coyle works as an energy analyst for Toward Utility Rate Normalization (TURN), a consumer advocacy group in California that claims 30,000 members.
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The January mini-forum failed to discuss a key underlying assumption made by PoolCo proponents. The assumption is that price competition will really exist in tomorrow's wholesale electric market.
Bruce W. Radford
Merger planning is touchy business. In a hotel crowded with utility executives gathered together to talk mergers, you notice everything: Who's there and who isn't. Who's talking to whom. Who came with his lawyers. And who's always out in the hall on the phone.
That's why I had so much fun last month at the Eighth Annual Utility M&A Symposium, sponsored by EXNET (Public Utilities Reports and The Management Exchange).
Lori A. Burkhart
Citing credit uncertainties stemming from impending deregulation, Moody's Investors Service has posted negative ratings outlooks for the U.S. electric, telecommunications, and natural gas industries (with the exception of the pipeline segment). Moody's acknowledges, however, that the impact of deregulation will depend on market maturity, relative cost structure, degree of integration, and regulatory flexibility.
Power-supply costs and nonproduction operation and maintenance (O&M) costs differ markedly, both between regions and between utilities within regions. In an open market, only companies with a competitive cost structure will be able to compete effectively.
High costs reflect high embedded costs; above-market, long-term coal-supply and power-purchase contracts; and relatively high nonproduction O&M expenses.