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Law & Lawyers

Purchased Power Contracts: Marrying Production and Financial Efficiencies

Electric utilities incur indirect financial costs when they turn to unregulated generators (NUGs) to buy power. These indirect costs can lead to lower bond ratings and undermine competitive advantage, depending upon the type of contract.

In this case we analyzed the combined effects of NUG power purchases on generating and capital costs for a representative utility (Utility A) with a relatively large amount of NUG purchased power.

Byline: 
Gary W. Dorris and Timothy Mount
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Frontlines

A few weeks ago I picked up a copy of one of those law firm newsletters, this one published quarterly by Reid & Priest, titled the Utility Telecommunications Advisor.

Byline: 
Bruce W. Radford
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People

A Moody's report, Legal Disaggregation Threatens Bondholder Security, warns that bondholders (em previously secured by a blanket lien on substantially all of a utility's property (em may find themselves secured solely by generating assets, whose real market value may be less than the outstanding secured debt. Moody's identifies 14 companies that may spin off transmission and distribution (T&D) assets, retaining generating assets because of indenture restrictions.

Byline: 
Lori A. Burkhart
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Joules

Nearly 18 million households are strong candidates for conversion to natural gas heating. So says the

American Gas Association (A.G.A.). The AGA estimates that 7.6 million natural gas customers don't use gas for heating and about 10.2 million households lack gas service, although it is available in their neighborhoods. To maintain its heating market dominance, the industry plans to promote the advantages of gas to homebuilders as well as to existing and potential customers.

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New Corporate Structures Place Bondholders at Risk

A Moody's report, Legal Disaggregation Threatens Bondholder Security, warns that bondholders (em previously secured by a blanket lien on substantially all of a utility's property (em may find themselves secured solely by generating assets, whose real market value may be less than the outstanding secured debt. Moody's identifies 14 companies that may spin off transmission and distribution (T&D) assets, retaining generating assets because of indenture restrictions.

Byline: 
Lori A. Burkhart
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James River Refuses $1-Million Cut

The James River Corp.'s Dixie Cup manufacturing plant in Darlington, SC, has declined a $1-million rate cut offered by Carolina Power & Light Co. Dixie Cup, which hopes to slash its electric bill by $700,000 a year, or $4.9 million over seven years, said the offer was only one-fifth what it needs. Meanwhile, it has asked the City of Darlington to municipalize its electric system. Dixie Cup has asked for a citizen referendum; the city council is awaiting the outcome of a municipalization feasibility study.

Byline: 
Lori A. Burkhart
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Restructuring: It's Not Unpatriotic Anymore

Consumer advocates, utility chiefs, regulators, and analysts offered conflicting visions of retail competition's future at NASUCA's 1996 Capitol Hill Conference.

The National Association of State Consumer Advocates ( NASUCA) conference, "Restructuring the Electric Industry: What Are the Costs and Benefits to Consumers?," was held on February 29 and March 1 in the Rayburn House Office Building. The event was co-sponsored by Rep.

Byline: 
Joseph F. Schuler, Jr.
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Outsourcing Fleet Management: Boon or Bust?

To an outsourcing company, offering services to utilities to manage their motor vehicle fleets may seem like a simple economic proposition. "We can do it better and cheaper," the outsourcers say.

But it's not that easy. Thorny issues arise (em in economics, quality, administration, and labor relations. And they must be faced head on.

Few utilities today have avoided outsourcing one function or another in the effort to cut costs. Some utilities have been burned.

Byline: 
Joseph F. Schuler, Jr.
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Perspective

The 129 federally owned plants that make up the five PMAs generate about 6 percent of the electricity sold in the United States.1 By law, the PMAs sell wholesale power at cost to legally stipulated "preference customers" (em i.e., municipal utilities and rural electric cooperatives.

Byline: 
Clyde Wayne Crews, Jr.
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Niagara Mohawk Refuses "Adequate assurances"

U.S. District Court Judge John E. Sprizzo has ruled that Niagara Mohawk Power Corp. (NiMo) has no right to demand "adequate assurances" from independent power producers (IPPs) that unsecured tracking account balances will be repaid. The decision stems from a series of lawsuits filed by IPPs in response to a February 1994 letter from NiMo threatening contract repudiation unless the assurances were given (Ecogen Four Partners v.

Byline: 
Lori A. Burkhart
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