George A. Avery
Too many rules can make any plant uncompetitive.
Now, more than ever, the commission must weigh
the costs when it looks at health and safety, decommissioning and antitrust impacts. Nuclear assets seem to pop to the surface wherever one looks for causes behind the current upheaval in the U.S. electric utility industry. The nuclear experience (em with its costly prudence reviews so prevalent during the 1980s (em has helped fuel a major shift in attitude.
Senior utility managers have now come to accept fundamental changes in the electric industry.
Hossein Haeri, M. Sami Khawaja, and Matei Perussi
Do mergers and "critical mass" really make a difference? The answer, it seems, is yes.
To become more competitive, U.S. electric utilities have embarked on a quest in recent years to improve operational efficiency and factor productivity. The question is: Are utilities making progress? And, which companies have gained a competitive edge? Which have not?
Industry analysts have long argued that given the structure of the markets they serve and their cost-based, rate-setting procedures, electric utilities tend toward monopolistic behavior.
Lori A. Burkhart
A Contentious Bill Passes Senate (em Two Votes Shy of Blocking a Veto
Recently passed by the U.S. Senate, nuclear waste bill S. 104 lies mired in quicksand, facing a promised presidential veto, not to mention attacks from senators representing those states targeted for possible waste storage sites. Disposal of waste from the nation's nuclear generating plants has turned into possibly the most contentious issue on Capitol Hill.
Sen. Frank H.
Jay L. Witkin replaces Jerome Feit, who retired, as the Federal Energy Regulatory Commission's solicitor. Also at the FERC, Judith Ann Dowd will serve as an administrative law judge. Dowd joins the FERC from the National Labor Relations Board.
PacifiCorp hired John Carr as assistant v.p., global industrial sales. Carr joins PacifiCorp from Direct Services Industries, where he served as an executive director.
Melissa L. Reese was hired by CMS Marketing, Services and Trading as a natural gas trader. CMS Marketing is the energy marketing unit for CMS Energy Corp.
Touted as a panacea for stranded costs, securitization would forever shield rates from market scrutiny.
We consumers display an amazing talent to squander the fruits of our labor on the whim of the moment. Examples might include bungee jumping, vanity license plates or pet rocks. Or just about anything you might find in a magazine stuffed in the back of an airline seat.
Now make way for electric utility restructuring, where the latest fashion calls for securitization of uneconomic costs.
S&Ls won damages when the feds reneged on promises. Utilities could do the same.
It's tough to be a utility CFO these days. For decades, electric utilities have served both as target and conscripted agent of government policy. Utilities pay disproportionately high taxes. Utility rate structures further distort market forces with subsidies flowing from business to residential. These policies actually defeat market forces. To large measure, many of these market failures arise from reconciling the hangover from uneconomic policy initiatives.
The Minnesota Legislature is poised to pass a bill that would allow the state to take full advantage of any relief granted by federal courts in pending cases over the U.S. Department of Energy's nuclear waste disposal obligations.
State Senator Steve Murphy and state Representative Steve Timble introduced the legislation, which has support in both Houses. The legislation was introduced to ensure that state ratepayers would see immediate relief if ordered by federal courts in pending cases in the next several months.
Lori A. Burkhart
Moody's Investors Service has concluded that a properly structured securitization backed by the future cash flow from a utility's stranded investments can achieve a credit rating higher than the rating of the senior debt of the utility.
Moody's said this ability bodes well for the increasing number of investor-owned utilities expected to issue up to $75 billion of such securities by 2000 to recover uneconomic investments.
Zond Development Corp. will supply MidAmerican Energy Co. with 45 MW of wind-generated power per month for 20 years. Terms of the agreement were not released, but Zond will begin supplying energy within three years of regulatory approval. The contract helps fulfill the utility's alternate energy requirements under Iowa law. Zond will generate the power from about 150 wind turbines planned for Buena Vista County. The windmills will interconnect with the MidAmerican transmission system at a nearby substation.
CMS Energy Corp.'s energy marketing unit, CMS Marketing, Services and Trading, hired David B. Geyer as v.p., risk management. Geyer's responsibilities include hedging, arbitrage and trading. CMS Generation Co.'s contract with Thailand's AMATA-EGCO Power Ltd., prompted the promotion of W. David Carni from operations superintendent to operations and maintenance plant manager.
Walter J. Gilbert, Volunteer Energy Corp. v.p., will head the company's newly opened office. Gilbert's added duties include special projects relating to gas acquisition, gas purchasing and marketing.