One of the most exciting challenges facing electric utilities is the opportunity to participate on the so-called "information highway." Not only is the technology evolving at a dazzling pace, but the opportunities to make or lose money will be staggering. The growth in sales of electricity has been and will be relatively slow compared to the dynamic growth in sales of cable television, information, online, cellular telephone, and other telecommunications services.

Annual Annual EPS

Close Close Percent 52-Wk 52-Wk Div Div Book P/E Last

Company Region 09/30/94 12/30/94 Change High Low Rate Yield Value Ratio 12 Mos. Electric Utilities AEP Company Inc. Midwest 32.88 31.75 3.42 35.75 27.25 2.40 7.56 22.68 12 2.71

Unicom Corp.

The Federal Energy Regulatory Commission (FERC) has issued its comprehensive notice of proposed rulemaking (NOPR) designed to move the wholesale electric industry to a more competitive marketplace. The order, Open Access Non-discriminatory Transmission Services by Public Utilities and Recovery of Stranded Costs by Public and Transmitting Utilities, weighs in at over 300 pages (Docket Nos.

The electric power industry is mutating all over the globe. We can analyze, study, and compare, yet no single and universal model has emerged in any country. Each has developed a solution of its own.

The restructuring of the U.S. electric power industry has provoked a strong response here in Canada, but few seem to care that a U.S. solution could prove ill-advised on this side of the border. The structures of electric industries are fundamentally different in both countries.

The U.S. District Court for the Southern District of Indiana has declared portions of the Indiana Environmental Compliance Plans Act unconstitutional, striking down those sections that favor use of Indiana coal. The Act authorized Indiana to preapprove compliance plans files by electric utilities in response to the Clean Air Act Amendments of 1990 (CAAA), requiring the plans to favor coal mined in the state. The district court ruled that the Act violates the commerce clause, finding that the challenged portions sought to eliminate or limit use of western coal.

The bankrupt El Paso Electric Co. (EPE) has asked the New Mexico Public Utilities Commission for permission to issue securities as part of its proposed acquisition by Central and South West Corp. (CSW) (em a necessary step in consummating the merger. Under EPE's third amended plan of reorganization, the utility would recapitalize by issuing new debt securities and preferred stock. CSW also would infuse additional common equity into EPE. The new securities, along with cash payments and shares of CSW common stock, would be used to settle the outstanding claims of EPE's creditors.

The New York Public Service Commission (PSC) has frozen 1995 electric rates for Long Island Lighting Co. (LILCO) and for Consolidated Edison Co. (CE), emphasizing the need for both utilities to control costs. CE had asked the PSC to approve a three-year rate plan that includes a $223-million (3.6-percent) increase the first year. According to Fitch Investors Service, both orders offer constructive and clear signals that the PSC will attempt to strike a reasonable balance between investor and consumer interests.

The Independent Power Producers of New York, Inc. (IPPNY) has released an initial white paper on restructuring the electric industry in New York State. The paper concludes that electric rates in New York are too high and suggests paramount objectives: 1) all customers should enjoy direct access and choice among electric suppliers, and 2) disaggregation of vertically integrated utilities must occur in such a way that the surviving natural monopolies (em the wires businesses (em remain financially indifferent to customer choice of supply.

Southern California Edison (SoCalEd) has unveiled a plan to slash its electric rates 25 percent by 2000, in anticipation of increased competition. The goal is a "real" price decrease (that is, adjusted for inflation), which translates into a system average price reduction from the present 10.7 cents per kilowatt-hour to below 10 cents. SoCalEd will consider a broad range of initiatives, most of which will require the approval of the California Public Utilites Commission. Included is an immediate rate freeze for residential and small business customers through 1996.

The Minnesota Court of Appeals has upheld a Minnesota Public Utilities Commission (PUC) ruling that Minnegasco's appliance sales and service business should be charged for the value of goodwill related to Minnegasco's name, reputation, and image. The court also ruled that the cost of responding to emergency gas leak calls should be shared by the utility and its appliance service businesses (Docket Nos. C5-94-1820 and C7-94-1821).