To better understand the performance of the electric utility sector from both a short-term and long-term perspective, we examined the total shareholder return (TSR)—dividends plus change in stock price—of 58 electric companies for 2005 and for three- and five-year periods. We grouped these companies into four categories to better understand the impact of alternative strategies on investor performance: Recovering, Traditionalist, Growth, and Merger.

Even as many hope that repeal of the Public Utility Holding Company Act (PUHCA) will lead to more efficient and rational corporate structures, they also fear that repeal could foster irrational exuberance, with mergers that fail spectacularly. Maybe that explains why every new utility merger announcement is being met with a much higher level of scrutiny than in past decades.

(January 2006) Kathleen Chagnon joined Saul Ewing LLP as a partner in its business department. Sierra Pacific Resources announced that Donald D. Snyder was elected to its board of directors. Avista Corp. named Linda M. Jones director of corporate communications. Allegheny Energy Inc. named Loyd (Aldie) Warnock vice president, external affairs. And others...

We talk with Cinergy’s James E. Rogers, DTE Energy’s Anthony F. Earley Jr., Constellation Energy’s Mayo A. Shattuck III, Xcel Energy’s Wayne H. Brunetti, FPL Group Inc.’s Lewis Hay III, and TXU’s C. John Wilder.

Business & Money

Sticking to the Knitting:

A review of three years of post-Enron stock performance by electric utilities.

Immediately following the Enron collapse, investors dumped the stock of any electric power company that appeared to be pursuing non-traditional growth strategies. Any company that emphasized unregulated businesses-investments in overseas assets, merchant power plant development, and energy marketing and trading-was suspect.

People

New Opportunities:

Jack Hawks, EPSA's current vice president of public affairs and planning, took on additional responsibilities as EPSA's acting vice president of policy. He replaced Julie Simon, who left the association to join Constellation Energy Group as a managing director. Hawks previously was vice president, Regulatory Policy, for PG&E National Energy Group.

People

New Opportunities:

The California Public Utilities Commission (PUC) named Steve Larson executive director. Larson most recently was executive director of the California Energy Commission and chief deputy director of the department of finance.

PG&E Corp. elected Leslie H. Everett senior vice president and assistant to the chairman. PG&E Corp. also elected Russell M. Jackson senior vice president, human resources.

People

New Opportunities:

Southern Co. chose Francis S. Blake to stand for election to its board of directors. Blake is an executive vice president at The Home Depot. Blake's election would bring the board to 11 members.

Mirant announced that M. Michele Burns is the company's new CFO and executive vice president, charged with leading the company's financial restructuring. Burns previously has been executive vice president for Delta Air Lines Inc. and a partner with Arthur Anderson LLP.

Business & Money

A spate of proposed U.S. tax rule changes soon may open a window of opportunity for certain utilities.

In the mid-1990s, before the rise of the Internet and the fall of Enron changed the calculus of business investing and the regulatory landscape, the historically staid U.S. utility industry began to be viewed as a "growth play." This triggered a global buying spree that led U.S. companies to invest tens of billions of dollars in electricity generation and distribution businesses all over the world.