Business & Money

Experts debate whether KKR's leveraged buyout of UniSource Energy is right for the industry.

"From a public policy standpoint, should a utility that provides a vital public good be owned by a private group that gains ownership by taking on a high degree of debt (risk)?"

How the wind farm capacity factor and a tax subsidy can beef up a utility's bottom line.

Many interested by a profit motive or an environmental motive wax eloquently about the economy of wind farms to generate electricity, since wind energy is an environmentally friendly source of energy or "green power." Thus, the interest in wind farms attracts the attention of citizens, environmental groups, politicians, and commercial companies.

Beware of a national energy crisis that eclipses California's.

It seems rather elementary in an economic downturn to say that generating capacity will easily match demand over the next few years, especially with all the new plants that have been built lately. But what happens to the supply picture when you factor in a possible economic upswing, with continued high natural gas prices, an illiquid wholesale market, and an aging transmission infrastructure?

(November 15, 2002) With interest rates at record lows, it is not surprising to find downward pressure on allowances for return on equity (ROE) set by state public utility commissions in retail rate cases. (The table presented herein shows the results of our annual survey of authorized rates of return on common equity for state-regulated energy utilities.)

S&P, Moody's, and Fitch tell why credit issues now rule the energy sector.

This year saw energy companies forced to make some grim choices-issuing new stock in falling markets, angering investors with dividend cutbacks, selling prized assets at fire sale prices. Some blame it on the rating agencies-the bond kings-who imposed tougher credit standards after the fall of Enron.

One might say, when it comes to FERC, some state public utilities commissions' lack of faith is disturbing—to paraphrase Lord Vader. It's also necessary, as any journalist would tell you. The FERC NOPR on standard market design (SMD)—which completes the "trilogy" of regulation on wholesale markets, as chairman Pat Wood described it—had some state PUCs blasting the NOPR even before its July 31 release.

No one has yet quantified or qualified the devastation to industry reputation, electric competition, or energy companies' future earnings power caused by the current round of energy trading scandals that is shaking the industry to its core.

 

News Digest

 

News Digest