Fortnightly Magazine - February 15 1995

Letting Go of Electric Generation

The year-long decline in the electric utility stock market has caught most market observers off guard. Picking the winners among electrics has become more difficult. Says Ed Tirello, long-time market savant and utility equity analyst at NatWest Securities, "Competition and retail wheeling have made the selection process nearly impossible short term."

To identify tomorrow's best industry performers, electric utility analysts have focused on generation.

FERC Asked to Suspend CPUC Auctions

Southern California Edison (SCE) has asked the Federal Energy Regulatory Commission (FERC) to halt the state's Biennial Resource Plan Update energy auction (BRPU). SCE charges that the California Public Utilities Commission (CPUC) violated the Public Utility Regulatory Policies Act (PURPA) and FERC regulations by reinstating the auction late last year.

SCE believes that the auction, which requires California utilities to enter purchased-power contracts, could increase its potential stranded costs by up to $4 billion (in nominal dollars).