The decision in September by Malcolm S. Forbes, Jr., millionaire businessman sans political experience, to launch a bid for the White House in 1996 prompts comparison with another millionaire businessman and political neophyte, Wendell L. Willkie, who defied conventional wisdom 55 years ago and won the GOP nomination to oppose Franklin D. Roosevelt in the 1940 Presidential election.
Forbes himself relishes the comparison.
When economic reformers in the old Soviet Union searched for a metaphor to describe their move to a market economy, they a spoke of a horseman jumping a ditch. The true test of a strategy was that it carried you to the other side. It was no time for half-measures.
Electric utility regulators face a similar challenge.
The beleaguered Public Utilities Regulatory Policies Act of 1978 (PURPA) has a new assailant (em U.S. Rep. Cliff Stearns (R-FL). Stearns's bipartisan legislation, H.R. 2562, the "Ratepayer Protection Act," proposes repeal of section 210 of PURPA, which requires electric utilities to purchase power at avoided costs.
Speaking last fall in New York City, Rep. John D. Dingell (D-MI), the ranking Democratic leader of the House Commerce Committee, questioned the need for federal legislation on electric utility restructuring, and even warned the audience that passage of any federal legislation in the 105th Congress to require electric competition was far from guaranteed.
The occasion for the talk was a conference entitled, "Deregulation (em The Changing Electric Utility Industry (em Opportunities and Risks," sponsored by the financial house of Bear, Stearns & Co.
One of my first assignments when I was a reporter for this magazine was a story on the flap over the Environmental Protection Agency's 1990 draft report on electromagnetic fields (EMF).
Bunker Hill. Gettysburg. Pearl Harbor. Iwo Jima. The Cold War. Each of these famous conflicts resonates in our history books. Despite the end of the Cold War, we may face another battle, this time between the Federal Energy Regulatory Commission (FERC) and the states over jurisdiction.
For the partners in a utility merger, the celebration must wait. After opening the most delicate of dialogues, and then negotiating the price and closing the deal, the merger partners must yet gain the approval of regulators. The application may lie sealed in its FedEx pouch, safely on its way to Washington.
Differences of opinion make for good horse races and bad jokes about economists, and those who are studying the recent wave of electric utility merger announcements have not let us down. Some of these economists optimistically believe that the mergers act as forces for competition, since they will combine corporate assets and staffs to bolster operating efficiency and market acumen at the merged companies. Other economists, who see transmission as the root of monopoly power, are more pessimistic.
State regulators continue to update methods of pricing telecommunications services, using price caps for local exchange carriers (LECs) while expanding existing pricing flexibility for interexchange carriers (IXCs). The emerging trend toward inviting competitors to serve the local market, including basic local exchange service, also continues. Some of the activity mirrors ongoing developments at the federal level, such as major regulatory reforms under debate in the Congress and court-supervised modifications to existing service restrictions stemming from the AT&T divestiture.
At Addison Mizner's pink fantasy on a Spanish theme, the Boca Raton Resort, the Edison Electric Institute (EEI) waited for Godot. Yes, that was the theme of EEI's 30th financial conference, and its first plunge into literature. You may remember the play, in which two hobos talk endlessly while waiting for the mysterious Godot, who has not yet arrived by the final curtain. In the same way, electric utilities and those who invest in them have been awaiting the advent of restructuring, the California remake of the industry, retail wheeling somewhere, and the wipeout of stranded assets.