A U.S. District Court (Eastern District, Oklahoma) has ruled that the City of Stilwell's attempted condemnation of Ozark Electric Cooperative facilities and customers within an annexed area of the city's corporate boundaries was preempted under federal law. The court found that allowing the city to "skim the cream" of the co-op's service area would frustrate the Rural Electrification Act's (REAct's) objective of providing reliable and affordable electric service to rural America.

In the United States, the Federal Energy Regulatory Commission (FERC) has undertaken the task of guiding the electric power industry from regulation to competition. But unless the FERC develops a plan to consider all facets of electric deregulation at the same time, we may end up driving on the wrong side of the road.

Last October the FERC issued its policy statement on electric transmission pricing. See, Inquiry Concern. Pricing Policy for Trans. Servs.

By Kenneth W. Costello, Robert E. Burns, and Youssef HegazyThe electric power industry is next in line for dramatic change. Competition has edged into individual markets, particularly the bulk-power market. This move toward competition has provoked debate in several states over the merits of retail wheeling. Specifically, should retail customers have the right to purchase their power requirements from sources other than the local utility? Many states have addressed the issue in different forums, at different levels of intensity.

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.

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.

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.

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.

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.

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.