Fortnightly Magazine - June 15 1996

The movement to introduce competition in the electricity industry comes at a time when many utilities are already ailing or underperforming. In fact, since 1990, half of U.S. investor-owned utilities (IOUs) have failed to consistently grow their dividends, or have cut or eliminated them altogether. According to a new study by Resource Data International, U.S. Electric Utility Industry Merger and Acquisitions, 1996, the current trend toward mergers and acquisitions is fueled by a desire to improve shareholder returns.

Long-distance telephone rates for U.S. businesses dropped 7.9 percent from February 1995 to February 1996, according to the International Telecommunications Price Survey, released by National Utility Service, Inc. on April 16. At the same time, local calling rates decreased by only 1.5 percent.

The Nuclear Regulatory Commission has approved Portland General Electric Co.'s (PGE's) decommissioning plan for the Trojan nuclear power plant. The Trojan plant, which began operating in 1975, was permanently shut down in January 1993. PGE filed its decommissioning plan in January 1995, proposing to move the spent fuel to onsite dry cask storage, dismantle radioactive structures, and decontaminate the site for unrestricted use (except for the dry-cask storage area). t

Lori A. Burkhart is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

In April, Texas Utilities announced that it would buy ENSERCH, Western Resources launched a hostile takeover bid for Kansas City Power & Light, and The Southern Co. initiated its ultimately futile bid for the United Kingdom's National Power. Eight other pending mergers involving major electric utilities have been announced during the last year. Utility managements clearly believe their future success requires merging with other utilities.