Joseph F. Schuler, Jr.
Utility witnesses want it both ways:
Stranded-cost recovery plus incentives for renewable energy.A New England utility executive told a U.S.
Michael T. Maloney, Robert E. McCormick, and Chad A. McGowan
Recovery: All FERC'ed Up
By Michael T. Maloney, Robert E.
McCormick, and Chad A. McGowan
The "lost-revenues" approach in Order 888 ignores the fact that cash flow drives
asset valuation . . .
. . . the key to measuring uneconomic investment.
Stephen L. Teichler
Monopoly rents? Not in the short run. The real enemy is a price war, fueled by indifference to stranded costs. And when that happens, antitrust laws won't offer much help.Competition has formally begun in the electric service industry. The Federal Energy Regulatory Commission (FERC) has issued Order 888, giving generators access to wholesale loads throughout the nation.
Phillip S. Cross
The Maine Public Utilities Commission (PUC) has rejected a request by Central Maine Power Co. to suspend a proceeding to develop an interim competition transition charge.
Charles Studness is not the type of person I would like to loan money to. I say this because if interest rates dropped in the future he would believe he was now entitled to borrow at the lower rates and not pay me what was owed.
In his latest diatribe against stranded-cost recovery ("Stranded-cost Recovery: It's Un-American," Financial News, July 15, 1996, p. 43), Studness tells us that recovery of stranded costs will keep Americans from purchasing electricity at the competitive price.
It certainly will; however, first all debts must be paid.
I am shocked that a respected and learned analyst of the utility industry like Charles Studness would espouse a position that stranded-cost recovery is somehow "un-American" ("Stranded-cost Recovery: It's Un-American," Financial News, July 15, 1996, p. 43).
Contrary to the claims of Mr. Studness, recovery of stranded cost is a fundamental right protected by the U.S. Constitution.
Charles M. Studness
Despite two years of debate, little progress has been made toward a solution to the issue of stranded costs. And since the two sides have almost no common ground, any accommodation seems unlikely. Utilities that seek stranded-cost recovery appear to have the upper hand at present, but the stiffest resistance still lies ahead. The Federal Energy Regulatory Commission's Order 888 clearly favors utilities, but customer reaction signals a shift to another venue.
David M. Wise
The restructuring debate in the electric industry has focused on nuclear assets at risk for "stranding" under deregulation, while another issue has largely eluded public scrutiny: accumulated deferred federal income taxes (ADFITs). ADFITs represent money that utilities have received from ratepayers to cover federal tax expenses not yet actually recognized and paid.
Agustin Ros, John L. Domagalski, and Philip R. O'Connor
Investors are taking stock
of utility exposure to price competition.The utility trade press and even the general financial press have featured the views of regulators, utility executives, legislators, and various consumer advocates on the stranded-cost question. Stranded costs easily represent the most contentious issue facing the electric industry as it moves to an era of competition.
Comparing Nonprice Terms in Utility
Filings Against FERC's Pro Forma Tariffs
AS ONE MIGHT EXPECT, THE VARIATIONS REFLECT THE HISTORIC TENSION BETWEEN NATIVE LOAD AND WHOLESALE TRANSACTIONS.