Fortnightly Magazine - July 15 1995
The Georgia Public Service Commission has completed the first step required to implement the state's Telecommunications and Competition Development Act of 1995 (which mandates changes in telephone regulation) by issuing rules for local exchange carriers seeking to abandon traditional rate regulation in favor of alternative performance-based rate plans, including price caps. It issued separate filing requirements to obtain certificates for competitive local exchange service (also permitted under the new state law).
In the alphabet soup of regulatory acronyms, performance-based ratemaking (PBR) may help shape events well into the next century. At present, PBR is being implemented, or considered by, public utility commissions (PUCs) in over 20 states. By 2000, PBR is likely to reach most of the 50 states as well as the Federal Energy Regulatory Commission. The pressures of a global economy have raised the stakes.
federal-state tensions currently affecting energy regulatory policy in America.
The Massachusetts Department of Public Utilities (DPU) has completed a long-awaited rate plan for New England Telephone and Telegraph Co. (dba NYNEX), adopting price-cap regulation without earnings sharing, but with strong measures to protect ratepayers from monopoly pricing, investment risk, and subsidies of utility ventures. The plan also includes price floors and separates competitive and monopoly services for pricing purposes. The DPU also approved a rate freeze for basic residential service until 2001, but rejected a claim that rates should fall during that time.
For the past several decades, utility regulation at the state level dealt with secure local markets and truly captive customers. A regulatory compact flourished that offered reasonable prices to customers, while guaranteeing the monopolist the opportunity to earn a fair rate of return on prudently incurred investments.
The Securities and Exchange Commission's Division of Investment Management has proposed repeal of the Public Utility Holding Company Act of 1935 (PUHCA), with consumer safeguards preserved and transferred to the Federal Energy Regulatory Commission (FERC). Safeguards would include state access to holding company books and records, federal audit authority, and oversight of affiliate transactions.
Any executive who has gone through a merger, however well planned and executed, knows that it is a challenging process. Two essential ingredients are required before merger discussions can proceed from the initial "what if" stage to agreement on all critical and strategic issues. These ingredients must be developed by the chief executive officers through face-to-face meetings and a combination of intuitive response as well as specific examination of strategic issues.
(R-CA) in a letter attacking the Federal Energy Regulatory Commission's (FERC's) February 22 decision that the California Public Utility Commission's resource auction violated the Public Utility Regulatory Policies Act in failing to consider all sources in setting avoided costs. The letter opposes what it labels the FERC's attempt to overturn California's Biennial Resource Plan Update (BRPU).
While the intensity of management activity was very high throughout the merger planning process, it was generally well ordered, in large measure because our Corporate/ Utility Transition Team and 16 sub-teams formed an effective vehicle for managing the planning process.
The Transition Team was given less than one year from the July 27, 1994, merger announcement date to plan the implementation of the merger.