PSEG Settles Rate Cases

The Newark Star Ledger:

The state yesterday reached a tentative agreement with Public Service Electric & Gas to settle outstanding utility rate cases, allowing the state's biggest gas and electric utility to collect $87 million more in revenue from its customers.

The proposed settlements would lead to a tiny increase in electric bills for the utility's 2.1 million customers, but result in a modest decrease in monthly gas bills for about 1.7 million customers because the price of natural gas has dropped so dramatically in re cent months.

Electric Utility Earnings

Third quarter profit reports are coming in:

PPL's profits were up 15%

FirstEnergy's earnings climbed 37%

FPL profits jumped 55%

CEG's profits rose 75%

ComEd to Seek Increase

AP via CBS2Chicago.com:

Electric provider ComEd plans to ask state regulators to approve a delivery rate increase in 2007, despite a plan that already will hike electricity bills for Illinois customers by an average 22 percent starting in January.

Officials at ComEd and its parent company, Chicago-based Exelon Corp., said they will ask the Illinois Commerce Commission to approve a delivery rate increase sometime during the second quarter of 2007.

Spitzer Opposes NY Resort

The New York Times:

Attorney General Eliot Spitzer’s office said yesterday that it opposed a luxury resort planned for the Catskill Mountains, calling it an “unacceptable risk” to New York City’s drinking water system. James M. Tierney, the watershed inspector general in Mr. Spitzer’s office, said in a letter to federal officials that the proposal for a large resort flanking the Belleayre Mountain Ski Center would undercut the city’s efforts to avoid building a water filtration plant at a cost of $6 billion to $8 billion.

Broadband in California

San Jose Mercury News:

Saying California lags other states in government policies that promote high-speed Internet access, Gov. Arnold Schwarzenegger Friday signed an executive order to set up a task force to streamline permitting and speed up the construction of broadband networks.

"We have to make sure government is not an obstacle," Schwarzenegger said during a San Francisco medical symposium exploring how to use high-speed Internet connections to diagnose patients in distant locations.

During a press conference, surrounded by executives from Microsoft, Cisco and Juniper Networks, among others, Schwarzenegger cited a three-year-old TechNet study that found that California ranked 14th among 50 states in government policies that encourage broadband. About half of the state's population has access to broadband, mirroring national figures.

Wind KOs Power

Forbes:

Thousands of homes and businesses had no electricity Sunday from Maryland to Maine as a storm system blasted the region with wind gusting to more than 50 mph, knocking over trees and a tall construction crane. The storm was blamed for two deaths.

Gusts as high as 70 mph were possible Sunday in parts of northern New York state, the National Weather Service said.

Verizon's Earnings

AP via Forbes:

Verizon Communications Inc.'s profit edged up in the third quarter, beating Wall Street forecasts as a powerful showing by Verizon Wireless and the addition of the MCI long-distance business helped boost the phone company's revenues nearly 26 percent.

The company said Monday it earned $1.92 billion, or 66 cents per share, in the July-September quarter, up from $1.87 billion, or 68 cents per share in the same period last year. Per-share results fell because Verizon (nyse: VZ - news - people ) has more shares outstanding than a year ago.

Power Purchase Review in NJ

The Trenton Times:

The state is asking an independent expert to examine how New Jersey's four utilities buy power for their customers to ensure ratepayers are not paying prices that are too high.

The action by the state Board of Public Utilities yesterday aims to resolve those concerns before next February, when the electric utilities purchase the power they need for customers at an annual online auction. The prices paid this past year were 55 percent higher than the previous year, and during the past two years have gone up 90 percent.

Exelon Posts Loss

The Chicago Tribune:

Exelon Corp., the largest U.S. utility owner, reported a third-quarter loss of $44 million because of a charge related to a rate decision by Illinois regulators that cut the value of its Chicago operations.

The loss was 7 cents per share, compared with net income of $734 million, or $1.09, a year earlier, Chicago-based Exelon said in a statement today. Sales fell 1.6 percent to $4.4 billion as cooler weather than a year earlier lowered utility sales.

The actions of state regulators caused the loss. Exelon wrote down $776 million after the July decision in Illinois and recorded a $42 million charge for the failed $17.8 billion acquisition of Public Service Enterprise Group, blocked by New Jersey regulators last month. Excluding one-time costs, profit rose 7 percent to $609 million, less than analysts expected.

Deregulation Has Failed

The Wall Street Journal (subscription):

Deregulating electricity has long been an ardent goal of many in the U.S. and other industrialized nations. Instead of stodgy utilities collecting nearly guaranteed profits and having little motive to improve their efficiency, backers have hoped deregulation would bring innovation and lower prices to an essential sector of the economy. The reality is messier, as consumers fail to take advantage of their new options -- or fail to gain any options -- while clever companies that know how to work the system prosper.

Shopping for Power in CT

The Hartford Courant:

A combination of factors is driving businesses to start shopping for generation.

For the past seven years since deregulation started, suppliers have said the utilities' prices were lower than what competitive suppliers could offer. Recent price increases are changing that. Customers who get their generation from CL&P saw their rates climb an estimated 20 percent this year. That could increase again next year. The state's other major utility, United Illuminating, which serves the New Haven and Bridgeport areas, could see rates jump 50 percent. Suppliers say these rate increases are making their prices competitive in Connecticut for the first time. Their pitch is that they can tailor a power purchase by purchasing from generators a mix of fixed prices and real-time prices, on-peak and off-peak rates. The utilities, in contrast, purchase power less frequently, in larger blocks.

FPL-Constellation Merger Dies

PRNewswire:

FPL Group, Inc. and Constellation Energy today announced they have reached a joint and amicable agreement to terminate their plans to merge.

Constellation Energy initiated a request to end the planned merger, citing continued uncertainty over regulatory and judicial matters in Maryland and the potential for a protracted and open-ended merger review process.

Skilling Gets 24-Year Sentence

HispanicBusiness:

Sending a strong signal to the corporate community, a federal judge convicted former Enron Corp Chief Executive Officer Jeffrey Skilling to more than 24 years in prison on Monday for his role in an accounting fraud that brought down the company.

US District Court Judge Sim Lake sentenced Skilling in a Houston, Texas courtroom after hearing testimony from several victims in the case. Skilling was convicted in May on 19 counts of fraud, conspiracy and insider trading at the energy-trading firm.

Phone Company Earnings

Forbes:

Bell South's earnings are up 30%

AT&T's earnings are up 74%

The Fruits of Deregulation

The New York Times:

[E]ven as some investors have profited handsomely by buying and sometimes quickly reselling power plants, electricity customers, who were supposed to be the biggest beneficiaries of the new system, have not fared so well. Not only have their electricity rates not fallen, in many cases they are rising even faster than the prices of the fuels used to make the electricity. Those increases stand in contrast to the significantly lower prices in other businesses in which competition was introduced, such as airlines and long-distance calling.

PPL's Power Purchase Plan

The Times Leader (PA):

The cost of electricity for customers of PPL Electric Utilities could spike in a few years, as price limits imposed in 1997 come off at the end of 2009. To cushion the blow, the company has asked the Public Utility Commission for permission to buy power on futures markets over the next three years, averaging the cost rather than taking a chance on what prices will be just as the caps come off.

Because the cost of fuels like oil and natural gas that are used to generate electricity spiked after the 2005 hurricane season, the caps have kept customers’ bills artificially low.

AT&T & BellSouth

MarketWatch:

AT&T Inc. executives reiterated a series of proposals on Friday to win final regulatory approval for its acquisition of BellSouth Corp., but the company did not publicly offer any new incentives aimed at swaying critics of the merger.

One week ago, the Federal Communications Commission postponed its vote on AT&T's $80 billion purchase of BellSouth until Nov. 3, after the agency's two Democrats demanded concessions from the two phone companies.

FERC Approves Grid/KeySpan Deal

The Deal:

[The Federal Energy Regulatory Commission] FERC approved British utility National Grid plc's plan to acquire KeySpan Corp., an operator of natural gas utilities in the Northeast, for $7.3 billion in a move that would create the nation's third-largest energy delivery utility.

National Grid already distributes electricity and natural gas to nearly 4 million customers in the Northeast states of Massachusetts, New Hampshire, New York and Rhode Island. KeySpan, based in Brooklyn, N.Y., is the company's fifth U.S. acquisition and the largest natural gas distributor in the Northeast. National Grid agreed to pay $42 per share for KeySpan and assume $4.5 billion in KeySpan debt, valuing the deal at $7.3 billion.

Buffalo Cleanup

The New York Times:

BUFFALO, Oct. 18 — More than 100,000 homes and businesses remained without power here on Wednesday, nearly a week after a preseason snowstorm dumped almost two feet of snow and wreaked havoc on trees and power lines.

Twelve deaths have been attributed to the storm, and schools are still closed. Officials say the cleanup could cost more than $30 million.

EarthLink BPL Trial

Light Reading:

GERMANTOWN, Md. -- Telkonet, Inc., the leader in providing in-building broadband access over existing electrical wiring, and EarthLink, the next generation Internet service provider, have agreed to test broadband over power line access and Internet voice service in nine apartment complexes located in the Washington, D.C. area using Telkonet’s powerline backbone.

Penn Power Hikes

The Herald (Sharon, PA):

WESTERN PENNSYLVANIA — Local electric costs could nearly double for certain Pennsylvania Power Co. customers under a rate case expected to be approved Thursday by the Pennsylvania Public Utility Commission, said those familiar with the case.

Under the hike, the electric generation portion of residential bills could surge by more than 60 percent, local analysts said.

Energy Conservation

RealEstateJournal:

America is facing a crisis when it comes to electricity. But also a tremendous opportunity.

The forces that put us here look grim. Energy prices are high, supplies are increasingly tight, and anxiety is growing about climate change. But that dark outlook is driving consumers, utilities and public officials to finally take advantage of innovations that could radically reshape the nation's power consumption without lowering the standard of living.

Some are technological fixes, from more-efficient light bulbs to variable-speed motors that use less energy when the load on them isn't as heavy. Others involve public policy. States are rewriting their building codes with an eye on conservation, and Washington is trying to lay down efficiency standards for more household appliances and electronic goods. Utilities are joining the effort as well, offering consumers rebates for buying efficient appliances and urging customers to use electricity more wisely.

Electric Competition Failing

The New York Times via IHT:

A decade after competition was introduced, long-distance telephone rates in the United States had fallen by half, air fares by more than a fourth and trucking rates by a fourth. But a decade after the federal government opened the business of generating electricity to competition, the market has produced no such decline.

Instead, more rate increase requests are pending now than ever before, said Jim Owen, a spokesman for the Edison Electric Institute, the association for the investor-owned utilities that provide about 60 percent of power in the United States. The investor-owned electric utility industry published a report in June titled "Why Are Electricity Prices Increasing?"

Con Ed Outage Report

AP via Topix:

A utility that was heavily criticized after a summer power outage left about 100,000 residents in the dark for 10 days praised itself in a report on the blackout released Thursday.

The report by Consolidated Edison said its officials stopped the blackout from spreading to 90,000 additional customers in the affected areas of Queens. It also detailed how the utility was quick to respond by deploying all available personnel on an around-the-clock basis to restore power.

Water Stocks Are Hot

Barron's (subscription):

WALL STREET IS PUMPED ABOUT WATER, and for good reason. Globally, the $365 billion business is burgeoning as countries spend billions to repair and build infrastructure to funnel clean water to people and industry. Some experts think $1.5 trillion in capital spending could flow into the sector in the next five years, promising a steady stream of business for a host of companies, from pump makers to water utilities. The market, which encompasses residential and industrial water and wastewater treatment and services, is growing by 4% to 6% a year in developed countries, and as much as 15% in emerging markets, estimates Goldman Sachs.

Less than 1% of the planet's water is drinkable. Yet, demand has been rising steadily. A Unesco study estimates world consumption could reach 2,764 billion cubic kilometers by 2025, up from 2,182 billion in 2000.

Verizon to Spin Off Directories

New York Times:

Verizon Communications is close to deciding to spin off rather than sell its directories division, because a spinoff would cost it less in taxes, according to a person briefed on the discussions.

Verizon’s board is expected to begin debating the matter in the next few weeks and could make a final decision in about a month, this person said. Verizon has said it would spin off or sell the group, Verizon Information Services, by the end of the year.

Power Supply Shortage

Wall Street Journal (subscription):

A report by the North American Electric Reliability Council warns demand for electricity is increasing three times as fast as resources are being added in the U.S., a trend that could shake electric-system reliability in the coming decade.

In its first report since the organization's duties were expanded by Congress, the grid organization, known as NERC, said U.S. demand will increase by about 20% from 2006 to 2015, outstripping investment in new electrical supply.

The NERC report is available online.

The nuclear industry is poised to help:

Facing steadily growing energy demand, pressure to cut airborne emissions, and armed with a raft of federal incentives, U.S. power generators are reassembling the pieces needed to build commercial reactors.

There is widespread belief in the industry and among analysts that the first of these new nuclear facilities will be on line by 2015.

Nat Gas Prices

MarketWatch:

November natural gas dropped 36.8 cents, or 6%, Thursday to close at $5.782 per million British thermal units, after touching a more than one-week low of $5.74. The Energy Department reported a slightly smaller-than-expected rise in last week's natural-gas supplies, but inventories were still around 14% above that of a year ago.

NRC to Look at Indian Point

AP via Topix:

The new chairman of the Nuclear Regulatory Commission has ordered an independent review of how it oversees the Indian Point nuclear power plants.

Chairman Dale Klein, who was installed in July, ordered NRC staff on Wednesday to develop a plan 'because of repeated inquiries about the adequacy of NRC oversight and licensee performance' at the two IP reactors in Buchanan, on the Hudson River 35 miles north of midtown Manhattan.

Qwest Stock Sale

Canadian Press:

A block of 66 million shares of Qwest Communications (NYSE:Q) stock reportedly has been sold for about US$540 million, fuelling speculation from one analyst that the seller likely was Qwest founder Philip Anschutz, also its largest shareholder.

Constellation Selling Plants

Reuters:

Constellation Energy Group Inc. on Wednesday said it would sell six natural gas-fired power plants to private equity group Tenaska Power Fund LP for $1.635 billion.

Delmarva (Opinion)

Prof. Tylor Claggett in The Daily Times (Delmarva):

Necessary, but not glamorous, is the ongoing maintenance required to keep electrical transmission and distribution systems operating. There also is the more obvious shortage of both generating and T&D assets in this area.

Because maintenance seldom creates headlines, business leaders and politicians are reluctant to invest in this area. As a society, we are paying for this lack of attention with numerous outages recently caused by corrosion, damaged insulation and degraded transformers.

Managers often are rewarded when they show short-run profits. This fact of corporate life provides significant motivation for deferring maintenance. However, utilities must also satisfy the rate-minimizing dictates of public utility commissions. One consequence of holding rates artificially low is maintenance schedules frequently are prolonged and neglected.

AT&T & SBC Get DOJ OK

Forbes:

AT&T Inc.'s $78 billion buyout of BellSouth Corp. headed toward expected approval at the Justice Department on Wednesday, clearing the way for a final decision a day later by the Federal Communications Commission.

Done.

Terrorism & Utilities

Energy Biz Insider:

The threat of terrorism is pervasive, particularly in light of turbulent world events. Emergency response plans are thus becoming the norm. And utilities have a vital role to play. Not only do they provide essential services but they are also in a position to assess just how vulnerable communities are and any effects of a horrific act.

Heating Bills

MarketWatch:

The recent drop seen in natural gas prices is likely to help soften U.S. consumer heating bills this winter, the American Gas Association said at a briefing on Monday.

The group said consumers may see a drop of as much as 10% compared with last year's bills, but officials also warned that consumers heating with natural gas should not expect a dramatic fall in their utility bills.

SBC Loses Appeal

AP via KRGVTV:

A federal appeals court is siding with the Texas Public Utility Commission in a dispute over an application by the former SBC Texas to provide long-distance service.

The Fifth US Circuit Court of Appeals in New Orleans ruled Wednesday that the PUC acted legally in changing a model agreement for phone companies to share networks.

The ruling upheld a decision by a federal judge in San Antonio. The appeals court says Congress gave state regulators power to interpret and enforce modifications to the agreements.

LNG

New York Times:

The Sabine River channel, where alligators and speckled trout live alongside petrochemical plants and oil refineries, has suddenly become the center of a quiet revolution in the world of natural gas.

And it is mainly at the prodding of a little-known company called Cheniere Energy, with help from Exxon Mobil and Sempra Energy. Together they have overcome formidable regulatory hurdles to build three new liquefied natural gas terminals on the channel that will double the nation’s capacity to import natural gas by 2011...

Ever since natural gas prices spiked from 2001 to 2005, Cheniere has been joined by many others in the buildup. Even as prices of natural gas futures have fallen this summer to four-year lows, companies are spending up to $9 billion on building new terminals or upgrading old ones, with the nexus of activity decidedly along Texas and Louisiana shores.

More than a dozen new liquefied natural gas terminal projects have been approved by the federal government in the last four years, all but one in the gulf region. Within a few years, there could be six terminals within 30 miles of the Sabine River alone.

BPL

Energy Biz Insider:

Broadband over power lines was once an abstract concept. But, it is now real. Utilities, in fact, are using their current distribution lines to not only communicate internally but to also deliver high-speed Internet access to their customers.

Power Rates & Politics in CT

WTXX-TV:

State utility regulators have missed an Oct. 1 deadline for announcing big electric rate hikes for United Illuminating Co. customers because, they said, new bids from electricity suppliers must be sought for a portion of UI's power needs - and Democratic gubernatorial challenger John DeStefano charged Monday that the regulators are intentionally stalling until after next month's election to shield incumbent Gov. M. Jodi Rell from criticism.

New Yorkers Using Less Water

The New York Times:

New York’s record population is straining mass transit, sapping power supplies, crowding classrooms and generally increasing congestion, but New Yorkers are using less water than at any time in more than a half-century.

Constellation Rate Cut

The Baltimore Sun:

Legislation aimed at lowering electric rates for 1.1 million Maryland consumers starting next year may face a court challenge if the proposed merger by Constellation Energy Group and a Florida utility owner falls apart amid regulatory delays, legal experts say.

Constellation, the corporate parent of Baltimore Gas and Electric Co., in a recent regulatory filing questioned the legality of a state law forcing the utility to forgo $386 million in fees it previously was allowed to collect from customers. The legislation passed in June ordered BGE to stop collecting certain fees for 10 years in order to reduce a 72 percent electric rate increase.