SCE

After Stranding Recovery, What?

Intense though it has been, the debate over stranded electric investment has addressed only half of the issue. What the utilities will do with the money is as important as whether they should recover anything at all.

Retail competition will accelerate the decline of utility-owned generation; utilities will rely less on their own production and more on purchased power to serve their remaining customers.

Rate Unbundling: Are We There Yet? A Reality Check

In an article entitled "Rate Unbundling: Are We There Yet?" (PUBLIC UTILITIES FORTNIGHTLY, Feb. 15, 1996, p. 30), authors Susan Stratton Morse, Meg Meal, and Melissa Lavinson urge regulators to unbundle the cost of capital to recognize that the business risk of electric generation exceeds that of transmission and distribution (T&D).

Trends

Curbing Market Power:

The Larger, the Better

In recent years, increased competition and the threat of deregulation have spurred numerous mergers and acquisitions. Fourteen mergers have been completed by investor-owned utilities (IOUs) over the last five years; seven more have been announced. If all of these mergers receive approval, nearly 20 percent of the IOUs that existed in 1990 will no longer exist.

S&P Wary of CPUC Restructuring

Standard & Poor's (S&P) plans to maintain negative outlooks on the three largest California electric utilities (em Southern California Edison (SCE), San Diego Gas & Electric (SDG&E), and Pacific Gas & Electric (PG&E). Although it considers the California Public Utilities Commission's (CPUC's) December 20 electric restructuring order "reasonably favorable," S&P will not reexamine the ratings until it is sure the plan will be finalized as proposed. S&P's concern is that some members of the California State Senate believe small customer interests would not be adequately protected.

Joules

SCEcorp has a new corporate structure and name: Edison International. It also has a new subsidiary, Edison Source, which specializes in solutions for energy efficiency, the environment, and energy marketing. Edison International now has five subsidiaries; its flagship, Southern California Edison, is the nation's second-largest IOU.

Mojave Gets Green Light, But Troubles Persist

The Federal Energy Regulatory Commission (FERC) has issued an order denying rehearing, effectively allowing Mojave Pipeline Co. (MP) to construct and operate its Northward Expansion Facilities in California (Docket No. CP93-258-007). The FERC has already issued five substantive orders in the proceeding.

Especially contentious was the clash with the California Public Utility Commission (CPUC) over jurisdiction, leading to a February 1995 FERC order holding that the Northward Expansion was an interstate pipeline subject to federal oversight.

FERC's Mega-NOPR: The IOUs Respond

It comes as no surprise that regulated investor-owned utilities (IOUs) hold divergent views on the restructuring of the electric industry. Size, generation cost, transmission access, customer loyalty, and the friendliness of state regulators all factor into their individual visions of restructuring.