CONSUMER FRAUD. The National Association of Attorneys
General, meeting Nov. 18 in Washington, D.C., to discuss electric restructuring, issued a warning to electric consumers on fraudulent schemes and abusive practices by scam artists. The warning encourages consumers to check their electric bills for unusual provider names or charges, and to avoid participating in contests that require a signature that can be used to switch an account.
RATE REDUCTION BONDS. A new report from Fitch Investors
Service, California Direct Access Customer Plan, highlighted the credit implications for utility distribution companies and investors in the rate reduction bonds to be issued by special trusts of the California Infrastructure and Economic Development Bank. Fitch said that on balance, the mechanisms offer satisfactory protection for the credit of the companies and potential rate-reduction bondholders. About $6.2 billion of bonds have been issued for the state's largest IOUs: Southern California Edison, Pacific Gas and Electric, and San Diego Gas and Electric.
STRANDED COSTS. Government should help electric utilities
recover stranded costs, according to a new report released Nov. 18 by the Edison Electric Institute, since government allowed utilities to accumulate sunk costs and inefficiencies incompatible with a competitive regime. In their report, The Path of Least Resistance: Accelerating the Movement to Electric Industry Competition Through Transition Cost Compensation, authors Philip R. O'Connor and John L. Domagalski of Coopers and Lybrand argue that policymakers have long recognized a need to recover transition costs in deregulating other "network" industries, such as airlines, railroads, trucking, telecommunications and natural gas.