Fortnightly Magazine - May 15 1996

U S WEST Problems May End Alternative Regulation

The Oregon Public Utilities Commission (PUC) has begun formal action against U S WEST Communications, Inc., alleging noncompliance with service-quality standards. The PUC will decide whether to continue, modify, or terminate its regulatory agreement with that company. Staff have recommended that the PUC terminate alternative regulation for U S WEST.

PUC staff first found the company out of compliance with standards in 1994. Although the situation stabilized for a few months, network performance has deteriorated.

Byline: 
Lori A. Burkhart
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Maine Tightens Ex Parte Rules

The Maine Public Utilities Commission (PUC) has approved amendments to existing rules governing ex parte and other communications designed to influence the decisionmaking process in adjudicatory proceedings.

It found the changes necessary after representatives of New England Telephone and Telegraph Co. dba NYNEX, a local exchange carrier (LEC) regulated by the PUC, were reported engaged in lobbying activities.

Byline: 
Phillip S. Cross
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Moody's: Duke Stock Repurchase Stable

Moody's Investors Service has confirmed the credit ratings of Duke Power Co. (DP) despite the utility's decision to repurchase up to $1 billion in stock by 2000. Moody's expects DP to maintain its 'Aa2' senior secured bond rating. DP management intends to repurchase the stock while allowing a gradual increase in the retained earnings cushion. The program was designed to absorb the substantial cash inflow caused by the reversal of the Catawba power plant purchased-capacity levelization in 1996 and by the utility's declining capital expenditure needs.

Byline: 
Lori A. Burkhart
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Off Peak

Can DSM live with

competition?

Between 1992 and 1994, demand-side management (DSM) spending grew at a median annual rate of 16 percent for a survey group of 37 electric utilities (those reporting DSM expenditures of at least $5 million for 1993). For 1994-98, however, the same utilities project a median annual decline of 3 percent in their DSM expenditures. (Taken together, the 37 utilities - located primarily along the east and west coasts and in the industrial Midwest - accounted for 51.9 percent of all DSM expenditures for U.S.

Byline: 
Martin Schweitzer and Miriam Pye
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Leaseback Transaction a First

Old Dominion Electric Co-op. (ODEC) has entered into a leaseback financing transaction with First Union National Bank that could save its 12 member systems about $4 million per year. First Union leased Unit One of the Clover Power Station from ODEC for 22 years with an upfront cash payment of $47.5 million, then leased it back to ODEC.

Byline: 
Lori A. Burkhart
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Perspective

Since the federal Court of Appeals decision in the Calvert Cliffs case over 25 years ago, no power plant may be built without a thorough socioeconomic impact statement. Yet, schemes to alter the entire supply system of a state - or even the nation - are currently proposed with only cursory attention to socioeconomic consequences.

Byline: 
Frank Clements
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Stranded Costs: Is the Market Paying Attention? (A Look at Market-to-Book Ratios)

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.

Byline: 
Agustin Ros, John L. Domagalski, and Philip R. O'Connor
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Senate Panel Continues Inquiry into Electricity'sw Future

If the new rules of electric industry competition don't permit stranded-cost recovery, the credibility of the U.S. government would be seriously undermined. Or so an executive of one of the country's largest utilities told a Senate energy panel."We just have to keep in mind we incurred these costs based under what the rules were," said Jerry Jackson of Entergy Corp. "If the government is going to change those rules . . .

Byline: 
Joseph F. Schuler, Jr.
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