| Fortnightly

Taking Utilities Private: Return of the Barbarians

Experts debate whether KKR's leveraged buyout of UniSource Energy is right for the industry.

“From a public policy standpoint, should a utility that provides a vital public good be owned by a private group that gains ownership by taking on a high degree of debt (risk)?” Mark T. Williams, executive-in-residence at the Finance & Economics Department at Boston University, identifies the quintessential issue that will no doubt be heatedly debated in boardrooms and commissions as more utility CEOs are tempted to become private utilities through a leveraged buyout transaction. And tempted they will be.

Byline:

Richard Stavros

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Cross-Sound Blues

Legal challenges continue for the undersea transmission line.

When the Connecticut Siting Council granted a certificate of environmental compatibility and public need approving the Cross-Sound cable in January 2002, it determined that the project would provide a public benefit and would not have an environmental impact constituting “sufficient reason to deny the application.” At the time of this writing, it is in operation pursuant to federal order, while opponents continue to try to shut down the cable. What happened in 2003 to delay the project, and how might the ongoing struggle affect similar projects proposed or under way?

Byline:

Linda Randell and Bruce McDermott

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U.S. Glut, Global Opportunities

Where will the next development opportunities occur?

Naturally, many uncertainties cloud the forecast of regional and technological growth. China appears poised to accelerate orders for steam coal plants over the next two years. Issues of financing and market transparency may stifle needed development in Latin America and the former Soviet Union. Finally, today’s high natural gas prices, if sustained, may undercut the CCGT as the most economical power generation choice.

Byline:

Steve Piper and Wendy Mitts

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Rethinking Restructuring

Two Cato analysts suggest a return to the past-vertical integration, but now with no state regulators.

The defeat of the energy bill in the Senate last year has thrown electricity restructuring back on its heels. There clearly is no consensus among politicians or academics regarding how this industry ought to be organized or how it might best be regulated. Finding our way out of this morass requires a reconsideration of how we got to this dismal point in our regulatory journey. Doing so suggests a surprising series of conclusions about what has gone wrong and where to go from here.

Byline:

Peter Van Doren and Jerry Taylor

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People

People for February 2004.

New opportunities at Duke Energy, Northeast Utilities, Progress Energy, and more.

Byline:

PUF

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The Reliability Czar

Is FERC the rightful heir?

The possibility that energy legislation drafted last year won't pass in 2004 has created a power vacuum. Who now is czar of electric utility reliability?

Byline:

Richard Stavros

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Power Outages: A Tale of Two CIS Systems

What made BG&E's system more reliable than Pepco's?

Reliability and customer information systems (CIS) are rarely mentioned in the same breath. But in the wake of Hurricane Isabel last fall, the CIS at Baltimore Gas and Electric gets kudos for helping the utility keep on top of a widespread outage.

Byline:

Jennifer Alvey

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