Infrastructure investors have had their share of pain over the past few years, particularly in developing countries. Aside from worries about the safety and stability of the investment itself, investors also face a more expensive cost of capital. Political risk insurance cannot remove the uncertainties associated with infrastructure investments, but the combination of sound deal structure and clear and reasonable expectations by all parties can mitigate some of these risks.

The news is full of stories about Calpine and the difficulty merchant generation players face from the uncertainty and volatility of power markets. Now is a good time to review key measures of performance and profitability under uncertain conditions.

Even as many hope that repeal of the Public Utility Holding Company Act (PUHCA) will lead to more efficient and rational corporate structures, they also fear that repeal could foster irrational exuberance, with mergers that fail spectacularly. Maybe that explains why every new utility merger announcement is being met with a much higher level of scrutiny than in past decades.

Alignment of the business and the information technology (IT) functions within a company is critical to the effectiveness of any strategic initiative. Three years ago, our research identified a number of best practices in IT integration, as they affected M&A execution. What changed, according to our new survey, is the way senior IT executives and senior business managers define success in a merger transaction. With so much at stake in any merger, the distinctions between these two important management constituencies are critical.

In the near future, the majority of investor-owned electric utilities will request, and ultimately win, rate increases. What can utilities do to alter consumer perceptions of higher bills?

Miscellaneous distribution operations expenses totaled $878 million in 2004— the largest single element of the distribution operations expenditures. Greater integration of real-time data can bring such costs under control.

TSR is a paradox among financial metrics—dominant in assessments of past performance yet peripheral in plans for future performance. This paradox can be resolved.

In our annual technology forum, we talk with tech/information specialists at four companies: Patricia Lawicki at PG&E; Ken Fell at the New York ISO; Mark C. Williamson at American Transmission Co.; and John Seral at GE Energy.

When FERC opened wholesale power markets to competition a decade ago in Order No. 888, it codified a system for awarding grid access known as the pro forma Open-Access Transmission Tariff (OATT), founded on physical rights, and on the fiction that electrons travel along a “contract path.” Should the commission “tinker” with the OATT, making only surgical changes to make it current? Or, do events instead warrant a complete overhaul?

How does one determine the value of power contracts under early termination? Given the vagaries of the contracts themselves, the process is neither clear nor standard, and often results in protracted and costly litigation. Did the counterparty have the right to terminate in the first place?