Entergy

Average North America power-plant asset value is at $725/kW.¹ Compared with our winter 2005-2006 analysis, this figure has barely changed; however, we have seen significant value movements based on region, fuel, and asset types.

Hold on to your hats. The vaunted and vilified “standard market design”, once thought dead and buried, has been resuscitated, with all attendant chaos and rhetoric, but this time in the guise of a new proposal under the code name “open dispatch.” This new construct, as remarkable in its way as Einstein’s theory of indeterminate space and time, declares that electric transmission, long seen as one of a triumvirate of unique and essential utility industry sectors (along with generation and distribution), is little more than a mirage.

(December 2006) Michael Heyeck was named senior vice president of transmission at American Electric Power Co. Duke Energy announced that Jim Stanley would lead its Indiana utility as president. ITC Transmission, a subsidiary of ITC Holdings, hired Frances (Francie) Brown as director, state governmental affairs. Edward (Ted) J. Mooney and Jesse H. Ruiz were appointed to ComEd’s board of directors. And others.

(November 2007) Public Service Enterprise Group elected Ralph Izzo president and COO of the company and a member of the board of directors. Ralph LaRossa is president and COO of PSEG’s utility business, Public Service Electric and Gas Co. WGL Holdings Inc., and its subsidiary, Washington Gas Light Co., named Douglas Staebler vice president of engineering and construction, and Lauren Foley named vice president of consumer services. ISO New England Inc. elected two new board members: Richard A. Abdoo and Paul F. Levy. And others.

The search is on for the Holy Grail of risk management. Utilities are managing new risks, as more sophisticated systems and services become available.

(September 2006) Pacific Gas and Electric Co. elected Bill Harper as vice president of strategic sourcing and operations support. Piedmont Natural Gas hired Judy Z. Mayo as deputy general counsel at Piedmont. ITC Holdings Corp. appointed Bennett Stewart to its board of directors. Cleco Corp. named Jeffrey W. Hall senior vice president, governmental affairs, and chief diversity officer. And others.

Utilities are preparing for the eventual enforcement of new reliability rules from the North American Electric Reliability Council. As the Federal Energy Regulatory Commission continues its review of the proposed standards, we take a closer look at the effect of these rules on cyber-security, and offer a broad overview of all of the proposed reliability standards.

Is the love affair with utility stocks cooling? A Standard and Poor’s equity research report in late May included a negative outlook for electric utilities: “We think the sector will underperform in 2006, weakened by the rising interest-rate environment,” the report said. But not all investors agree. We talked with veteran portfolio manager Michael R. Yogg of Putnam Investments, who revealed how the modern-day investor views the utilities sector.

This month’s cover story focuses on how utilities intend to find the talent they’ll need over the next few years to replace all those retiring baby boomers. And part of that puzzle naturally involves executive pay: how to attract the best and brightest without going overboard on rewards for performance.

“I think it is my job as a leader to make sure that our values are always lived up to even when [they] conflict necessarily with our vision. That is what people look for at the end of the day. A leader’s role above all else is to make sure the truth is respected.”