Fortnightly Magazine - May 15 1995

N.Y. IPPs Want Direct Access, Disaggregation

The Independent Power Producers of New York, Inc. (IPPNY) has released an initial white paper on restructuring the electric industry in New York State. The paper concludes that electric rates in New York are too high and suggests paramount objectives: 1) all customers should enjoy direct access and choice among electric suppliers, and 2) disaggregation of vertically integrated utilities must occur in such a way that the surviving natural monopolies (em the wires businesses (em remain financially indifferent to customer choice of supply.

Credit Parameters in Flux: When Assets are Liabilities

The question I am asked most frequently is "Who will emerge as the 'winners' and 'losers' among today's electric utility companies?" The short answer is painfully simple. The winners will offer the best prices (a.k.a., the low-cost producers). The losers will be unable to cut prices to meet the market (a.k.a., the high-cost producers).

Unfortunately, real-world answers rarely come in black and white. The electric utility industry enjoys less pricing flexibility than one might imagine.

NY PSC Pares Rates for LILCO, Con Ed

The New York Public Service Commission (PSC) has frozen 1995 electric rates for Long Island Lighting Co. (LILCO) and for Consolidated Edison Co. (CE), emphasizing the need for both utilities to control costs. CE had asked the PSC to approve a three-year rate plan that includes a $223-million (3.6-percent) increase the first year. According to Fitch Investors Service, both orders offer constructive and clear signals that the PSC will attempt to strike a reasonable balance between investor and consumer interests.