The interim consultant's report on the Dominion Resources/Virginia Power (DRI/VP) merger identifies problems with the holding company structure.
DRI/VP claim that the report's corporate structure recommendations conflict substantially with their settlement agreement, and appear to impose unique and extraordinary constraints on corporate governance.
Citing credit uncertainties stemming from impending deregulation, Moody's Investors Service has posted negative ratings outlooks for the U.S. electric, telecommunications, and natural gas industries (with the exception of the pipeline segment). Moody's acknowledges, however, that the impact of deregulation will depend on market maturity, relative cost structure, degree of integration, and regulatory flexibility.
Average electricity prices are expected to remain virtually unchanged through 2010, rising a scant 0.4 cents per kilowatt-hour, according to the Energy Information Administration's (EIA's) "Annual Energy Outlook 1995" (DOE/EIA-0383(95)). If the forecast holds true, the average household electric bill should increase by only $3 to $4 per month. Good news for residential consumers; more pressure for utilities. The flat forecast reflects low projections for major fuel prices, which break with previous EIA forecasts. EIA administrator Jay E.
Competition
Power-supply costs and nonproduction operation and maintenance (O&M) costs differ markedly, both between regions and between utilities within regions. In an open market, only companies with a competitive cost structure will be able to compete effectively.
High costs reflect high embedded costs; above-market, long-term coal-supply and power-purchase contracts; and relatively high nonproduction O&M expenses.
Paul J. Evanson was named president of Florida Power & Light Co. to succeed Stephen E. Frank, who resigned in January. Frank led the company through a tough restructuring process. Evanson, 53, previously was v.p., finance, and CFO for both Florida Power & Light and FPL Group Inc. Evanson will be succeeded by Michael W.
The other day I heard a short news item on National Public Radio that made me stop and think. The item ran something like this: "Maxwell House has announced it will cut the price of its loose ground coffee to reflect a drop in the coffee futures market several months out."
Wasn't that easy? Call it integrated resource planning in the espresso lane. Note what Maxwell House did not do. It did not solicit a demand forecast or run the PROMOD computer model.
The year-long decline in the electric utility stock market has caught most market observers off guard. Picking the winners among electrics has become more difficult. Says Ed Tirello, long-time market savant and utility equity analyst at NatWest Securities, "Competition and retail wheeling have made the selection process nearly impossible short term."
To identify tomorrow's best industry performers, electric utility analysts have focused on generation.
The year-long decline in the electric utility stock market has caught most market observers off guard. Picking the winners among electrics has become more difficult. Says Ed Tirello, long-time market savant and utility equity analyst at NatWest Securities, "Competition and retail wheeling have made the selection process nearly impossible short term."
To identify tomorrow's best industry performers, electric utility analysts have focused on generation.
Stranded commitments (SC), because they are potentially huge, may be a show stopper for increased competition in the U.S. electricity industry. Utility shareholders, industrial customers, and small commercial and residential customers are likely to wage tough battles before state and federal regulatory commissions as they seek to reduce their exposure to these costs.