Entergy

One of the most exciting challenges facing electric utilities is the opportunity to participate on the so-called "information highway." Not only is the technology evolving at a dazzling pace, but the opportunities to make or lose money will be staggering. The growth in sales of electricity has been and will be relatively slow compared to the dynamic growth in sales of cable television, information, online, cellular telephone, and other telecommunications services.

Annual Annual EPS

Close Close Percent 52-Wk 52-Wk Div Div Book P/E Last

Company Region 09/30/94 12/30/94 Change High Low Rate Yield Value Ratio 12 Mos. Electric Utilities AEP Company Inc. Midwest 32.88 31.75 3.42 35.75 27.25 2.40 7.56 22.68 12 2.71

Unicom Corp.

Everybody's talking about electric utilities dabbling in telecommunications. That's fine. But how about vice versa? Maybe what we've really got is telephone companies (and cable television, too) getting into energy. That's different.

a comparable cost. But what, exactly, are those "different uses"?

Retail competition will render a substantial fraction of existing electric utility plant worthless. Some estimates are so large that the question of compensation for these so-called "stranded investments" overshadows debate on the value of retail competition. Advocates of compensation frequently appeal to a "regulatory compact." They claim that this compact justifies compensation for utilities on grounds of fairness. The case for fairness, however, is badly flawed. Moreover, compensation may adversely affect the efficiency of markets in which competition is emerging.

The Southern Company named A.W. (Bill) Dahlberg chairman and CEO in addition to his current duties as president. He succeeds Edward L. Addison, 65, who is retiring after 12 years as CEO and more than 40 years with the company. Dahlberg, 54, served as president since January 1, 1994. He began his career with The Southern Company at age 19 when he joined Georgia Power, a subsidiary, as a meter installer.

Ralph Johnson was named v.p., power resources, for the Texas-New Mexico Power Co.

On December 12, 1994, Craven Crowell, chairman of the board of the Tennessee Valley Authority (TVA), issued two well-publicized announcements. First, TVA would not finish three of the nuclear units it has had under construction since the 1970s, unless it could find partners willing to share their construction costs (a prospect he subsequently characterized as "very slim,").1 Second, TVA planned to set an internal cap on its total debt at a level $2 to $3 billion below the $30-billion limit imposed by the Congress.

Annual Annual EPS

Close Close Percent 52-Wk 52-Wk Div Div Book P/E Last

Company Region 09/30/94 12/30/94 Change High Low Rate Yield Value Ratio 12 Mos. Electric Utilities AEP Company Inc. Midwest 31.38 32.88 4.78 37.38 27.25 2.40 7.30 22.68 11 2.94

Unicom Corp. Midwest 22.25 24.25 8.99 28.75 20.63 1.60 6.60 24.39 - -0.31

Union Electric Co.

Competition

Power-supply costs and nonproduction operation and maintenance (O&M) costs differ markedly, both between regions and between utilities within regions. In an open market, only companies with a competitive cost structure will be able to compete effectively.

High costs reflect high embedded costs; above-market, long-term coal-supply and power-purchase contracts; and relatively high nonproduction O&M expenses.

Citing its desire to promote a fully competitive wholesale market for electric power, the Arkansas Public Service Commission (PSC) has waived restrictions on serving wholesale and retail loads in the state for Entergy Power Inc. Entergy had proposed to sell Oklahoma Gas & Electric Co. power wheeled from two generating facilities by Arkansas Power & Light Co. (AP&L), an Entergy affiliate.