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Law & Lawyers

NY PSC Pares Rates for LILCO, Con Ed

The New York Public Service Commission (PSC) has frozen 1995 electric rates for Long Island Lighting Co. (LILCO) and for Consolidated Edison Co. (CE), emphasizing the need for both utilities to control costs. CE had asked the PSC to approve a three-year rate plan that includes a $223-million (3.6-percent) increase the first year. According to Fitch Investors Service, both orders offer constructive and clear signals that the PSC will attempt to strike a reasonable balance between investor and consumer interests.

Byline: 
Lori A. Burkhart
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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).

Byline: 
Mark B. Lively
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New Securities May Be Issued in El Paso Merger

The bankrupt El Paso Electric Co. (EPE) has asked the New Mexico Public Utilities Commission for permission to issue securities as part of its proposed acquisition by Central and South West Corp. (CSW) (em a necessary step in consummating the merger. Under EPE's third amended plan of reorganization, the utility would recapitalize by issuing new debt securities and preferred stock. CSW also would infuse additional common equity into EPE. The new securities, along with cash payments and shares of CSW common stock, would be used to settle the outstanding claims of EPE's creditors.

Byline: 
Lori A. Burkhart
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Deregulation or Bust?

For better or worse, deregulation is now a factor in the electric utility industry. As a general proposition, deregulation makes for increased competition, which in turn will trim costs for consumers. Deregulation of the electric industry means that utilities face the prospect of freezing or reducing rates to retain market share. Stranded investments and the burdens of above-market supply contracts and construction and development contracts (especially nuclear-related contracts) will place additional pressure on these utilities and further reduce their revenue.

Byline: 
Jay M. Goffman and John R. Ashmead
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Protectionist State Coal Law Struck Down

The U.S. District Court for the Southern District of Indiana has declared portions of the Indiana Environmental Compliance Plans Act unconstitutional, striking down those sections that favor use of Indiana coal. The Act authorized Indiana to preapprove compliance plans files by electric utilities in response to the Clean Air Act Amendments of 1990 (CAAA), requiring the plans to favor coal mined in the state. The district court ruled that the Act violates the commerce clause, finding that the challenged portions sought to eliminate or limit use of western coal.

Byline: 
Lori A. Burkhart
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Let's End the Monopoly

My subject today is regulation and competition in the electric utility industry.

You all know only too well what's happened to this industry in the last decade or so: Inflation accelerated, interest rates rose, productivity growth slowed, fuel prices rose dramatically, growth in demand stopped, and the cost of meeting environmental and safety regulations soared. For utilities that was truly a devil's brew.

Byline: 
N/A
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Frontlines

It was after seven o'clock in the evening (em nearly 12 hours since the DOE-NARUC Second National Electricity Forum had gotten underway up in Providence, RI (em when it all finally hit home. This time the regulators were serious. People were paying attention.

Byline: 
Bruce W. Radford
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People

Richard J. Grossi, chairman and CEO of United Illuminating Co., has been elected chairman of the North American Reliability Council. Grossi will serve a two-year term.

Thomas L. Fisher, president and CEO of Northern Illinois Gas Co. has been elected chairman of the Gas Research Institute's board of directors. Fisher will serve a one-year term, along with newly elected vice chairman, John F. Riordan, president and CEO of MidCon Corp.

Chairman Thomas G.

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Mailbag

In his recent article, "The Future of Local Gas Distributors" (Feb 1, 1995, p. 20), Vinod Dar presents a vision of executives at the local distribution company (LDC) lining up to buy cemetery plots (em even as the gas marketers, charging on horseback, seize the high ground of "middle" and

core-markets.

That sort of bravado cannot substitute for an in-depth knowledge of gas distribution. Mr. Dar in fact distorts or ignores many realities of the gas business.

Byline: 
Vince Esposito
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"Merger of Equals" Primes NSP, WEPCO for Competition

Northern States Power Co. (NSP) and Wisconsin Energy Corp. (parent company of Wisconsin Electric Power Co., WEPCO, and Wisconsin Natural Gas Co.), have announced plans to merge, a move NSP says will create the tenth-largest investor-owned utility in the United States, based on market capitalization. The new company (em Primergy Corp. (em would operate as a registered public utility holding company and parent company of NSP and WEPCO, with the gas subsidiary perhaps spun off to comply with the Holding Company Act.

Byline: 
Bruce W. Radford
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