How to Achieve High Performance

Lessons from the top 40 utilities.

(September 2007) A senior executive at Accenture broadens the financial metrics behind the Fortnightly 40 to expound on the high performance behind this year’s ratings—and show the way for utilities aspiring to make the list in future years.

The 40 Best Energy Companies

Will 2007 be remembered as the year of the turnaround? Several new CEOs with bold transformation programs took top spots in our third annual ranking.

(September 2007) Consistent performance over time is the Holy Grail of corporate management, and a focus of many of the executives who made this year’s ranking. Who returned to the list, and who fell off? And more important, why?

Another Side to Decoupling: Share the Gain, Not the Pain

The New Jersey Board of Public Utilities finds incentive programs may be a better way.

New Jersey regulators say they have found a way to achieve conservation objectives while maintaining efficient operations, all without placing additional risk on consumers. How did they do it?

Return On Equity: Regulators Trust, but Verify

Some recent utility rate proceedings cast doubt on new ROE models and “risk adders.”

(November 2006) Our annual return on equity (ROE) survey broadly shows a continuing decline in the level of debate over issues specific to restructuring of the electric market. It also reveals a subtle shift back to investor requirements and overall business risks faced by regulated companies.

Industry Evolution: Financial Pressures Ahead

Can utilities simultaneously manage rising costs and pressing capital investment needs?

Does the utility industry have the financial strength sufficient to meet the combined challenges of: (1) sharply increasing and highly volatile fuel and purchased-power costs; (2) significant capital investment requirements; and (3) rising interest rates?

Letters to the Editor

To the Editor:

In “Rate-Base Cleansings: Rolling Over Ratepayers” (November 2005, p.58), Michael Majoros urges state public utility commissions to recognize a refundable regulatory liability for past charges to ratepayers for non-legal asset retirement costs.

A Candy-Coated Grid

Incentives for transmission investment could boost postage-stamp pricing over license-plate rates.

FERC proposed a new set of regulations, under the new section 219 of the Federal Power Act, explaining in broad outline how it might approve generous financial incentives for new investments in transmission—incentives once dubbed as “candy.” As of mid-January, the new NOPR had spawned more industry comment than just about any other FERC proposal in recent memory.

Total Shareholder Return: Planning a Future Perfect

Total shareholder return can not only be a measure of past performance, but it can be harnessed as the prime touchstone for planning future performance.

TSR is a paradox among financial metrics—dominant in assessments of past performance yet peripheral in plans for future performance. This paradox can be resolved.

Return on Equity: Gen Sector Issues

Ratemaking Special: A survey of recent retail rate cases for electric and gas utilities.

(November 2005) The results of annual survey of rates of return on equity authorized for major electric and natural-gas utilities—based on a sample of the retail rate cases conducted by state public utility commissions—show a vibrant and perhaps growing interest in traditional rate-of-return regulation.