Fortnightly Magazine - October 15 2003
New realities demand new direction from utilities.
The industry requires new analytical tools to incorporate the realities of today's higher risk operating and investment environment into the equity allowance process.
Business & Money
By approaching Sarbanes-Oxley compliance as an opportunity rather than a burden, companies can reap strategic rewards and become stronger.
The stakes have risen in the compliance game. A series of incendiary scandals-followed by the Sarbanes-Oxley Act and its implementing regulations-have focused the scorching light of public scrutiny onto public companies in all industries, and the heat is particularly intense for investor-owned utilities.
Has the Aug. 14 blackout finally made it more than a pipe dream?
Former Secretary of Energy Bill Richardson ticked off a whole lot of people in the industry when he pronounced the United States a superpower with "a Third World electricity grid."
Yet while debate continues about the causes of the Northeast blackout, there's no arguing that the majority of transmission and distribution in this country is controlled via mechanical technology largely developed in the 1950s.
What next? That seems to be the question on every utility executive's mind. After two years of stomach-wrenching ratings downgrades, agonizing downward valuations, embarrassing accounting scandals, skyrocketing gas prices, and positively stubborn mild weather, or the "perfect storm," as many have called it, many believe the worst is now over.
But will the the recovery be worth the wait?
How to benchmark return on equity (ROE) and depreciation expense in utility rate cases.
A close look at the effect of the dividend tax cut reveals a disappointing investor reaction.
While some predicted a very significant increase in price for utilities if dividend taxes were reduced, the actual price change data show a rather different picture.
A review of which technologies and companies stand to win and lose as a result of the 2003 blackout.
Mishap, human error, and malice regularly crash the electric system. We have lurched from the Western economic power crisis of 1999-2000 to the Eastern reliability power crisis of 2003. Neither more studies nor more blackouts have changed what's been built-an excessive quantity of large generation plants dependent on relatively few major transmission lines. On its current course, the grid's inevitable destination is disaster.
Wall Street wants utilities to return to basics, but the CEOs worry it won't be enough.
One can certainly understand why so many utility chiefs steered their companies back to basics over the past two years. They read the newspapers. They knew what the financial community was saying. Investors and debt-rating agencies might have overreacted, I suppose. Some on Wall Street seem to think so. Not all utilities should have been downgraded or downsized, they argue. Not all business plans were suspect.