return-on-equity (ROE) analyses.

It appears that The Washington Water Power Co. (WWP) and Sierra Pacific Power Co. (SPP), which were hoping for a quick OK on their proposed merger to form "Altus," may have been in the wrong place at the wrong time. Instead of a perfunctory approval, the WWP/SPP merger now may become the test case for evolving merger policy at the Federal Energy Regulatory Commission (FERC).

Perhaps the utilities should have seen it coming. In approving the Midwest Power Systems, Inc./Iowa-Illinois Gas & Electric Co. merger, FERC Commissioners William L.

Recovery of stranded investment is clearly the central point of contention in the debate over utility competition. Customers oppose competition and utilities favor it (em for what appear to be clear-cut reasons. Recovery would delay the benefits of competition for customers, but would give utilities additional cash and temporary protection against competitive price pressures. The battle has unfortunately turned into a morality play that centers on the right to recover stranded investment.

There are essentially two kinds of reliability: sufficient generating capacity, and sufficient transmission capacity. Although it often receives the most attention, generation accounts for only about 10 percent of reliability concerns. Even when there is a problem, there is usually time to prepare; demand can be reduced through voltage reductions, interruptible customers, public appeals, and as a last resort, rotating blackouts.

Moody's Investors Service has upgraded the credit ratings of PSI Energy Co. (PSI), Cincinnati Gas & Electric Co. (CGE), and Union Light Heat & Power Co. The upgrades (em which affect about $3.8 billion in debt securities (em reflect strengthening financial position coupled with low business risks.

American Electric Power Co. (AEP) plans to consolidate its Columbus, OH, nuclear generation management and support staff with the nuclear staff at its Donald C. Cook plant in Bridgman, MI. The relocation, scheduled for summer 1996, affects about 250 employees. About 50 positions

will be cut. Total employees in the AEP nuclear

organization will be reduced from about 1,300 to about 1,180, a 9.2-percent cut.

Northern Indiana Public Service Co. (NIPSCO) and IBM have developed the Integrity/Customer Services System, which provides any customer service with one telephone call. Customer questions that previously required several transfers will now be handled by a single representative who has access to billing, service, and repair information. Property owners with several buildings or several tenants at one building will receive a combined bill, rather than separate bills for each meter.

A division of UtiliCorp United has entered into an agreement to provide heating and cooling services to 170 public school districts in southern California. The UtiliCorp marketing branch, Broad Street/Energy One, will supply natural gas at prices below that of the local utility. The participating school districts spend about $12 million a year for natural gas to heat and cool their school buildings. "This is a unique contract because it shows quite dramatically how everyone can benefit from deregulation," said Brooks Burton, Energy One vice president.

It looks like PacifiCorp will have a little competition down under. A $1.2-billion conditional bid for an Australian electric utility (em made by an Entergy subsidiary, Entergy Power Group (em has been accepted by the State of Victoria.

The City of San Francisco has retained Strategic Energy Ltd. (SEL) to study whether the municipality should expand its own utility. "We will evaluate whether it makes sense for the citizens of San Francisco to break from Pacific Gas & Electric and expand their own electric utility," said SEL president Richard Zomnir.