Senate panel lobs shots at FERC's slow merger approvals.
Wall Street analysts and shareholder reps are urging Congress to help electric utilities recover stranded costs during nationwide deregulation to prevent a "cratering" of energy stocks.
One analyst recently testified that investors never expected 100-percent recovery. Another suggested that federal legislators should let states hammer out their own solutions.
But determining fair compensation state by state won't be easy, as witnesses and lawmakers conceded at recent hearings on Capitol Hill.
In fact, the testimony at the U.S. Senate Committee on Energy and Natural Resources occurred the same day Pennsylvania regulators braved a raucous hearing and approved a $1.1-billion stranded cost package. Texas legislators, meanwhile, nixed a bill that would have allowed utilities to use excess profits to pay down stranded costs.
Lastly, a governor-appointed mediator is trying to resolve differences between New Hampshire regulators and Northeast Utilities, according to Steven M. Fetter of Fitch Investors Service L.P., who testified at the Senate committee hearing.
"I would expect some combination could be worked out," Fetter observed. "If it is not, it would move New Hampshire from the front of the pack on competition to ... [the] back of the pack."
New Hampshire's deregulation plan called for about 60-percent recovery of stranded assets, but Northeast Utilities affiliates claimed they would go bankrupt under the formula.
Committee Chair Frank H. Murkowski (R-Alaska) asked what would happen on Wall Street if no utility's stranded costs were recovered (em as promoted in a bill introduced by Thomas D. DeLay (R-Texas).