Interviews by

What next? That seems to be the question on every utility executive's mind. After two years of stomach-wrenching ratings downgrades, agonizing downward valuations, embarrassing accounting scandals, skyrocketing gas prices, and positively stubborn mild weather, or the "perfect storm," as many have called it, many believe the worst is now over.

But will the the recovery be worth the wait?

Commission Watch

Why FERC must yield to bankruptcy law.

 

How will regulators react if the current trickle of bankruptcies within the debt-laden merchant power sector should suddenly become a torrent? Will they encourage the necessary restrcturing of debt, or will they stand in the way?

Commission Watch

The developing jurisdictional battle over authorizing rejection of wholesale power supply agreements is getting white-hot, pitting creditors against ratepayers.

 

Frontlines

Bankruptcy may not be better for ratepayers.

The commission nails companies, but orders payments.

The Federal Energy Regulatory Commission (FERC) finally dealt with the many issues that arose out of the 2000/2001 California energy crisis. On June 25, FERC issued a slew of orders that settled some old disputes, gave a glimpse of the future, and offered insight into the commissioners' thinking.

PJM would dictate grid expansion, even if not needed for reliability, and then push the cost of the upgrades on those who use them the most.

Chairman Pat Wood and his Federal Energy Regulatory Commission (FERC) may well have given up on attempts to impose a standard market design (SMD) on the electric utility industry, but that doesn't mean the nation's grid system operators won't try the same thing.

New Positions:

Allegheny Energy named David C. Benson its interim executive vice president, assuming the responsibilities of Allegheny Energy Supply President Michael P. Morrell, who will make use of the company's early retirement option program. Benson has been with Allegheny Energy for 25 years.

Cleco Corp. appointed Stephen M. Carter vice president of regulated generation. Carter earlier served as superintendent of Dolet Hills power station.

NRG's bankruptcy is challenging creditors' resolve to back merchants until power prices rebound.

A common complaint in the last few months by would-be buyers of merchant assets has been that all the choice power plants have been pledged as collateral to commercial banks in order to stave off bankruptcy. That's why not many transactions have taken place, merchant asset buyers say, as everything else in the market isn't worth the price being offered.

An evolving market demands a greater focus on power prices and required return on equity.

Valuation can be difficult even in stable markets, and executives setting their company's strategic course need to understand how the market for power projects is evolving and what may lie ahead.