Ralph Mabey, trustee for Cajun Electric Power Co-op. in its bankruptcy proceeding, has filed a reorganization plan at the Federal District Court in Baton Rouge, LA. Mabey chose a bid from NRG Energy, Inc. and Zeigler Coal Holding Co.: about $1.1 billion in cash to purchase most of Cajun's nonnuclear assets. However, that offer faces a competing bid filed by the Cajun Electric Members Committee, Southwestern Electric Power Co. (SEP), and Gulf States Utilities.
So the Federal Energy Regulatory Commission (FERC) won't break up the electric utility industry. But it may happen anyway (em if not at the FERC's direction, then perhaps under pressure from state regulators who, some say, are threatening to link stranded-cost recovery to vertical disaggregation.
What would a breakup mean for bonds and bondholders?
As we reported last month ("New Corporate Structures Place Bondholders at Risk," May 1, 1996, p.
If the new rules of electric industry competition don't permit stranded-cost recovery, the credibility of the U.S. government would be seriously undermined. Or so an executive of one of the country's largest utilities told a Senate energy panel."We just have to keep in mind we incurred these costs based under what the rules were," said Jerry Jackson of Entergy Corp. "If the government is going to change those rules . . .
The Arizona Corporation Commission has turned down a bid by Tucson Electric Power Co.
Columbia Gas Transmission Corp. and Columbia Gulf Transmission Co., the interstate natural gas pipeline subsidiaries of The Columbia Gas System, Inc., have a new chief executive officer (CEO), Catherine Good Abbott, as well as plans for an ambitious expansion. The project and the CEO mark the beginning of a new era for a once-troubled pipeline system that recently emerged from bankruptcy.
After four years and four tries, El Paso Electric Co. (EPE) has finally got a plan, and a ticket out of bankruptcy. EPE's fourth amended reorganization plan has been approved by the federal bankruptcy court as well as federal and state regulators, and received near-unanimous acceptance by creditors and stockholders.
The plan proposes two alternative methods of emerging from bankruptcy. Under the preferred alternative, EPE would use the proceeds from an underwritten public offering of first mortgage bonds to repay the claims of existing secured creditors in full.
Nowhere are the failings of traditional utility regulation more evident than on Long Island. The New York Public Service Commission (PSC) has raised rates for the Long Island Lighting Co. (LILCO) 31 percent since 1989. Rates are now over twice the national average (em the highest in the continental United States. Meanwhile, Long Island's economy has been ravaged by defense cutbacks that have erased 100,000 jobs (em a 10-percent drop in employment.
The merger voltage (I) is rising on the electric grid, but it remains to be seen which will win out: current (E) policy or resistance (R) to it.
The Chapter 11 reorganization plans for The Columbia Gas System, Inc. (CGS) and Columbia Gas Transmission Corp., its principal pipeline subsidiary, were confirmed on November 15 by U.S. Bankruptcy Court Judge Helen Balick. The reorganization plans call for a distribution of about $2.3 billion to pay debt owed by the corporation prior to its Chapter 11 filing, plus another $1.1 billion in interest on that debt. According to CGS chairman Oliver G.