Many executives of publicly held utility corporations have written severance agreements to protect them in the event of a change in control. However, these severance packages remain vulnerable to attack by acquirers.

Two separate threats are emerging. One involves a direct attack on drafting flaws in the plan documents. The other, more subtle, threat lies in the impact and interpretation of the special "Golden Parachute" rules under the Internal Revenue Code. This second threat warrants attention.

natural gas pipelines (Docket No. RM96-1-000). The rule would adopt the 140 standards recently filed by the Gas Industry Standards Board (GISB).

The proposal calls for a standard Internet connection between pipelines and customers, to eliminate the disparity in procedures and interfaces that have caused confusion to date.

"This is not an intent to strip away consumer protection," Sen. Alfonse M.

D'Amato (R-NY) told

a Senate panel about S. 1317, a bipartisan bill to repeal the Public Utility Holding Company Act (PUHCA).

D'Amato, chair of the Senate Banking, Housing and Urban Affairs Committee, received nods from federal and state regulators at the June 6 hearing, although each voiced reservations. Three utility chiefs spoke in favor of the legislation.

Consumer advocates took the opposite tack.

The Federal Energy Regulatory Commission (FERC) has issued its rehearing order for Great Lakes Gas Transmission Ltd. Partnership (GLGT), upholding its July 26, 1995, order allowing GLGT to roll in the costs of expanding its natural gas pipeline facilities (Docket Nos. RP91-143-030 et al.).

The July 26 order was issued on remand from the U.S. Court of Appeals for the D.C. Circuit, reversing a 1991 order allowing incremental pricing. The case arose when GLGT spent over $700 million to expand its pipeline system.

It's as significant for what it does not do as for what it does.

Order 888 marks a significant, yet limited, step in deregulating the U.S. electricity supply industry. Most important, for utility shareholders, the Federal Energy Regulatory Commission (FERC) has now apparently established a right to recover costs prudently incurred under the old regulatory compact (if not contract) that may become stranded by the Order. But (em and this is an important but (em the FERC is not going to hand out the money easily.

A struggle is underway for ownership of the utility business. Not a fight between companies, but a struggle within each company for the future of the utility.

The battle pits two groups against each other. One side consists of the operational professionals, such as the engineers who build and maintain the power grid. The other side includes an emerging group of marketing and communications professionals.

In the past, the engineers "owned" the company.

For the first time, monies have been awarded in an electromagnetic field (EMF) suit. Although it decided that a high-power underground electric transmission line did not cause cancer in Atlantic Electric Co. (AE) customer John Altoonian, a six-person jury has ordered the utility to pay him about $760,000 in damages for lost wages and emotional distress. The first jury was hopelessly deadlocked; the current alternate panel found AE unintentionally negligent. AE calls the award "confusing" and plans to appeal. (em LB

Joseph F. Schuler, Jr.

Ralph Mabey, trustee for Cajun Electric Power Co-op. in its bankruptcy proceeding, has filed a reorganization plan at the Federal District Court in Baton Rouge, LA. Mabey chose a bid from NRG Energy, Inc. and Zeigler Coal Holding Co.: about $1.1 billion in cash to purchase most of Cajun's nonnuclear assets. However, that offer faces a competing bid filed by the Cajun Electric Members Committee, Southwestern Electric Power Co. (SEP), and Gulf States Utilities.

In a recent report, A Free Market for Power Would Mean Revenue Losses for All Utilities (em But Some Would Suffer More Than Others, Prudential Securities simulated a competitive electricity market (em assuming that all industrial and commercial customers would be able to choose their electric supplier by 1998 (em to find out how a completely free market for power would affect utility revenues, earnings, and dividends.

The competitive risk study statistically measured marginal costs, then created a simulated spot-market electricity price for each of the 11 geographical reg