Fortnightly Magazine - May 15 1995

Real-time Pricing, Not Restructuring

Real-time Pricing, Not Restructuring

Richard Abdoo's article, "Wisconsin Electric's View of a More Competitive Industry," (Feb. 15, 1995), brought this quote to mind: "We trained

hard. . . . But it seemed that every time we were beginning to form up into teams we would be reorganized. I was to learn later in life that we tend to meet any situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization" (Petronius (em 256 BC).

Financial News

Annual Annual EPS

Close Close Percent 52-Wk 52-Wk Div Div Book P/E Last

Company Region 09/30/94 12/30/94 Change High Low Rate Yield Value Ratio 12 Mos. Electric Utilities AEP Company Inc. Midwest 32.88 31.75 3.42 35.75 27.25 2.40 7.56 22.68 12 2.71

Unicom Corp.


Everybody's talking about electric utilities dabbling in telecommunications. That's fine. But how about vice versa? Maybe what we've really got is telephone companies (and cable television, too) getting into energy. That's different.

Electric Utilities: Steering Clear on the Information HighwayJames H. McGrew

One of the most exciting challenges facing electric utilities is the opportunity to participate on the so-called "information highway." Not only is the technology evolving at a dazzling pace, but the opportunities to make or lose money will be staggering. The growth in sales of electricity has been and will be relatively slow compared to the dynamic growth in sales of cable television, information, online, cellular telephone, and other telecommunications services.


NorAm Energy Corp. has appointed Charles M. Oglesby president of the NorAm Trading & Transportation Group. NTTG includes NorAm's two pipelines, NorAm Field Services, and NorAm Energy Services. Oglesby was previously a v.p. of Coastal Corp. and president and CEO of Coastal Gas Services Co. William A. Kellstrom was promoted to v.p. of corporate business development. Kellstrom was previously president and COO of NorAm Energy Services, NTTG's marketing arm.

The Coastal Corp. has elected Richard G. Smead senior v.p.

LDC Rate Discounts Reveal Growing Competition

As evidence of a continuing trend toward competition in the retail market for natural gas, state regulators point to the continued popularity of special discount rates. Designed to allow local distribution companies (LDCs) to retain existing customers, these rates are often approved despite concerns about the costs and their effect on other customers.

The Delaware Public Service Commission (PSC), for one, recently approved a proposal from Delmarva Power & Light Co.

Appliance Disservice

Appliance Disservice

Gordon Canning's article, "Entering the Appliance Repair Business" (Feb. 1, 1995), contains several inaccuracies. First, Mr. Canning asserts that "the residential customer views the utility as a preferred provider." This is not a universal given. Residential customers only view a utility as a preferred provider of appliance service if the utility is allowed to engage in nonutility business activities and to subsidize these services below fair-market value.

Public Decries QFs for EMF and High Rates

The bad news for qualifying facilities (QFs) continues. A high-profile project in the District of Columbia appears dead, but developers won a small victory when a federal court refused to stop a suit by the developers against municipal officials for damages connected with the regulatory barriers erected by the city at the behest of concerned citizens. More damaging was the recent decision of the Massachusetts Supreme Court requiring reluctant regulators to review the ceiling price set for QF purchases in a recent bid conducted by Boston Edison Co.

Emissions Trading, NARUC Gods on Record

Emissions Trading:

NARUC Goes on Record

In a recent article, "Why Taxes Do Distort Emissions Trading" (Feb.15, 1995), Stanley I. Garnett II, chief financial officer of Allegheny Power System, Inc. discusses a legislative proposal currently promoted by his firm and the Chicago Board of Trade (CBOT). This proposal seeks to amend current Internal Revenue Service policy on federal tax treatment of the proceeds of emission allowance sales.

Local Exchange Competition Moves Forward in Michigan

The Michigan Public Service Commission (PSC) has approved terms for interconnection and mutual compensation between Ameritech Michigan, a dominant local exchange carrier (LEC), and City Signal, Inc., a newly certificated competitive provider of LEC services. The move marks another step in the PSC's experiment with local telephone competition in the Grand Rapids exchange.