U.S. utilities find
a wealth of opportunity
It drew more than $7 billion in investment from U.S. electric utility subsidiaries at the end of 1995. Ongoing privatization will likely draw billions more.
Five electric distribution companies and a generating company have been sold in Australia's southeastern State of Victoria, and four more generating companies are expected to go on the block. Unregulated subsidiaries of U.S. utilities already own or have interest in Victoria's five distribution companies, or "distcos."
And then there are several smaller investments: Northern States Power's NRG Energy, Inc.'s share of the $100-million recommissioning of a Queensland power station; Southern California Edison Corp.'s purchase, via Mission Energy Co., of a 51-percent stake in a Victoria power station for $1.1 billion; TransAlta Energy Corp.'s $39-million joint venture to build a western Australian power plant.
Other Australian states, such as Queensland, also are privatizing. Five of the country's six states are expected to move toward a National Electricity Market grid, although four aren't now connected. Sometime after 1997, however, power will be traded in a pool or through a series of regional interconnections.
What's the attraction for American utilities?
"It is perhaps the most attractive regulatory climate for the kind of transition that the electric energy industry is making that I see anywhere," says Frederick W. Buckman, president and CEO of PacifiCorp.