What the Supreme Court thinks about handicapping the incumbent to level the field for new players.
Regulators today sit on the horns of a dilemma: How far to level the field in the name of competition?
If regulators fear market power in the incumbent utility, and so impose restrictions on its activities and assets, they may impair its effectiveness and thus distort the very competition they attempt to foster.
How the FERC's RTO case has split the PUCs into five warring factions.
With momentum building for competition in retail energy markets, and with the real authority seeming to shift to the federal government, do regulators at the state public utility commissions (PUCs) still have a voice in setting policy for the electric transmission grid? After all, the Federal Energy Regulatory Commission enjoys exclusive jurisdiction over interstate transmission service. That's the one major utility sector likely to remain heavily regulated for some time.
Five commission chairs from states in all phases of deregulation ponder their changing roles. Will market success make them obsolete?
As most state electric competition plans are implemented within the next few years, regulators face an uncertain future. And they're already reflecting on their role in a changing industry.
Regulatory commissions in both Illinois and California have created panels to discuss the issue and the National Association of Regulatory Utility Commissioners (NARUC) has held closed-door sessions on the subject.
But who gets a slice of the pie?
In August the Bonneville Power Administration released its proposed wholesale electric rates for the five-year period from 2002 to 2006. The controversial proposal is subject to five months of scrutiny, including eight public hearings from Sept. 30 through Oct. 14, with adoption of final rates expected early in 2000.
In this era of emerging competitive markets, relatively low-priced federal power is prized by wholesale customers in the BPA's Northwestern U.S. service territory.
State PUCs
Gas Appliance Repair.
Illinois regulator Ruth Kretschmer takes a stand against deals that would rub out competitors.
I can't recall seeing a more cogent, convincing andpassionate plea for utility regulators to get off their backsides and actually take a stand on something, as when just the other day, I came across the dissenting opinion issued Sept. 23 by Ruth Kretschmer, of the Illinois Commerce Commission. There she takes her own agency to task for voting (3-2) to approve the proposed mega-merger between the telephone giant SBC Communications Inc.
A line-by-line case study of two high-priced portfolios, comparing fixed, variable and capital costs against forecasts of regional market prices.
A multi-billion-dollar wave of utility divestiture and power plant auctions has taken place during the last 18 months. Table 1 details some of these transactions, including the purchase price on a dollar-per-kilowatt basis and as a multiple of net book value. These measures frequently are cited as indications that buyers paid too much.
Global water shortages loom, but most U.S. utilities don't have long-range supply plans.
By 2050, according to estimates from Population Action International, one-fourth of the world's population likely will live in countries blighted by chronic or recurring shortages of fresh water. But are global water shortages perceived as an imminent threat in the United States? Not at most U.S. water utilities, it appears.
Mergers & Acquisitions
CP&L + Florida Progress. Carolina Power & Light announced Aug. 23 that it would purchase Florida Progress Corp. for $5.3 billion in a combination that would create the nation's ninth-largest utility in terms of generating capacity, with $6.7 billion in annual revenues and 2.5 million customers in three states. CP&L would pay a premium (between 16.5 percent and 21 percent) over the pre-announcement share price of FP stock.
Gas competition is heating up in Chicago, and Gulf suppliers may be the losers.
Chicago promises to be an exciting market in the natural gas industry during the next few years, as it becomes home to more than a billion cubic feet per day (Bcfd) of Canadian supplies. The birthplace of the electric blues is poised to become center stage for a super-charged competition among gas producers from Canada, the Rocky Mountains and the Mississippi delta.
By late 2000, the Alliance Pipeline in the Midwest will enjoy 1.2 Bcfd of additional natural gas capacity.