S&Ls won damages when the feds reneged on promises. Utilities could do the same.

It's tough to be a utility CFO these days. For decades, electric utilities have served both as target and conscripted agent of government policy. Utilities pay disproportionately high taxes. Utility rate structures further distort market forces with subsidies flowing from business to residential. These policies actually defeat market forces. To large measure, many of these market failures arise from reconciling the hangover from uneconomic policy initiatives.

With the end of monopoly in electric generation, utilities can assure savings by taking a creative approach to state and local taxation.

Deregulation of electric generation will force electric utilities to examine closely their state and local tax burden. Under deregulation, most state and local taxes will not be part of a reimbursable rate structure. Rather, such costs will directly influence bottom-line profitability.

Local property taxes take a big bite out of electric generation profits. Coal suppliers of utilities pay significant local taxes.

The Minnesota Legislature is poised to pass a bill that would allow the state to take full advantage of any relief granted by federal courts in pending cases over the U.S. Department of Energy's nuclear waste disposal obligations.

State Senator Steve Murphy and state Representative Steve Timble introduced the legislation, which has support in both Houses. The legislation was introduced to ensure that state ratepayers would see immediate relief if ordered by federal courts in pending cases in the next several months.

Cities throughout the U.S. contemplating take over of a privately owned utility may be more likely to move forward now that the governor of New Mexico signed legislation that has made such a prospect easier in that state.

New Mexico Gov. Gary Johnson (R) on April 11 signed H.B. 1181, which allows the city of Las Cruces to condemn property owned by El Paso Electric Co., paving the way for the municipality to take over the local electric distribution system.

"We're very pleased," said Christopher Good, a spokesman for the city. Las Cruces plans to move forward from here, he added.

Southwestern Electric Cooperative Inc. has notified Soyland Power Inc. it will terminate its electric supply contract and buy its full requirements from Cinergy Corp.

The cooperative said it can buy the wholesale power from Cinergy at a lower price. It is expected to start receiving electricity in April under a five-year contract. The agreement includes other services Cinergy may provide to Southwestern Electric Cooperative, such as economic assistance and new-business development opportunities.

New England Electric System has received preliminary proposals from 25 potential buyers for the purchase of its generation business.

The proposals, which were due March 25, are from utility affiliates, independent power producers, and energy companies.

New England Electric System noted that buyers would gain an immediate presence in the regional energy market, which opens to competition in mid-1997 for some Rhode Island customers, and in January 1998 for Massachusetts and New Hampshire customers.

Virginia Power Co. has asked the Virginia Corporation Commission to freeze its base electric rates through 2002, which would set the average residential electric bill in 2002 at virtually the same as it was in 1992.

The base rate freeze is part of an alternative regulation plan submitted to the commission on March 24, which is designed to ensure stability for electric customers and shareholders during the move toward more competitive markets.

According to Robert Bloom, a commissioner at the Pennsylvania Public Utility Commission, an article in the Philadelphia Inquirer regarding the release of the 1996 report card on Pennsylvania utilities contained "misinformation" and was "distorted."

That article reported the PUC refused to issue the 1996 report card because the commissioners disagreed on the amount of performance information that should be released in the new competitive environment (see "Headlines," FORTNIGHTLY, 3/15/97).

Competitive electric provider Electric Lite has drawn the attention of the South Carolina Public Service Commission with its promises of guaranteed rate reductions of 20 percent.

Electric Lite intends to compete against South Carolina investor-owned utilities for customers when the Legislature opens the market to competition.

The proposed "Competitive Power Act," if approved by the Legislature, would open the state's electric markets to competition in January 1998.

According to a new study by Resource Data International, the annual Outlook for Coal and Competing Fuels, U.S. electric load growth is accelerating, with actual utility generation growth expanding at rates comparable to the nation's real economic growth rate for the past two years.

Several electric measures suggest that in the mid-1990s, the nation is becoming more electric intensive. The 1996-1997 report suggests the nation's coal producers should see firm prices and strong demand growth in most producing regions in 1997.