To the Editor:
In the August edition of Public Utilities Fortnightly, Dr. Fred Grygiel and myself co-authored an article that explained how linkages within a holding company can negatively impact regulated utilities, and how ring-fencing by regulators may help to alleviate such effects ("Fencing in Regulated Utilities," p. 32). Unfortunately, the Fortnightly listed our ring-fencing article on the cover with the caption "Economists Blast S&P, Fitch Consolidated Ratings." This characterization is inconsistent with the substance of the article. While we are concerned about the effects of ratings linkage on regulated utilities, in no respect do we blame credit rating agencies. In fact, we strongly believe that the rating agencies are critical gatekeepers that point out for investors and regulators the potential linkages among holding company subsidiaries that could result in utility abuse or its credit downgrade.