BC

When an electric utility invests in a resource to serve its customers, it does so with the belief that the asset underlying the investment can be pledged as collateral to secure debt capital. But what happens if the asset is not owned by the company and, therefore, provides no collateral? The following situations illustrate:

Situation A

Electric utility "A" chooses to build a small generating plant to meet the future needs of its growing customer base.

In his article, "Entering the Appliance Repair Business" (Feb. 1, 1995), Gordon Canning paints a bleak picture for independent contractors seeking to prevent utilities from entering the appliance repair business. However, contrary to Mr. Canning's suggestion, at least one utility has been forced to withdraw from this business.

The nonstop dialogue about retail wheeling, power brokers, PoolCos, and restructuring overlooks customers and their increasing thirst for value-added services. Aside from a few emphatic words by some industrial users, little has been said about customer expectations. This article offers a snapshot of the brave new world of energy service marketing (ESM). ESM will take the place of demand-side management (DSM) and electricity marketing, blending the best of both.

ESM is simple.

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.

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).

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).

In his article "Making Hydro Sustainable" (Jan. 1, 1995), Thomas Russo forgets an important consideration in any large-scale engineering project: the social impact. The construction and commissioning of large-scale hydroelectric generating facilities have always required large capital investments and produced widespread impacts on the ecosystem. These impacts have generally been fairly obvious and carefully examined.

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 31.38 32.88 4.78 37.38 27.25 2.40 7.30 22.68 11 2.94

Unicom Corp. Midwest 22.25 24.25 8.99 28.75 20.63 1.60 6.60 24.39 - -0.31

Union Electric Co.