Thursday, November 30, 2006

FCC Private Briefing Criticized


With federal regulators deadlocked on what may prove to be the largest telecommunications merger in history, news about progress on the deal has become scarce and highly coveted.

So the small group of clients of Banc of America Securities LLC were privileged Wednesday to get an exclusive briefing from top-ranking staff of the Federal Communications Commission at hotel a block away from agency headquarters.

The meeting was described as "timely" in a brief item in Communications Daily, the telecommunications industry newsletter, with "topics including the AT&T/BellSouth merger and net neutrality pending at the Commission."

The meeting, however, was not open to the public or the media - it was for Banc of America "clients only..."

The FCC has been criticized in the past by public interest groups for its cozy relationship with industry, and Wednesday's episode was particularly disturbing, said Andrew Jay Schwartzman, president and CEO of the Media Access Project, a public interest law firm.

Duquesne PA Proceeding

Pittsburgh Tribune-Review:
Parties formally challenging the pending merger of Duquesne Light Co. into the Australia-based Macquarie Consortium have until Dec. 21 to submit testimony, the Pennsylvania Public Utility Commission said Tuesday. The half-dozen complainant groups, including small-business and consumer advocates, then may present and cross-examine expert witnesses during hearings in Harrisburg before Administrative Law Judge Robert Meehan on Jan. 30, 31 and Feb. 1. The judge's initial decision on the proposed merger is expected in early April, said PUC press secretary Jennifer Kocher.

Natural Gas Futures Are Up

January natural gas was last up 32.1 cents, or 3.8%, to $8.88 per million British thermal units, finding support from forecasts for colder weather in much of the U.S. as well as strength in crude-futures prices. January natural gas touched a high of $8.94, its strongest intraday level since Sept. 14. January crude was up $1.11 at $62.10 a barrel following a more than two-week high of $62.35.

Wednesday, November 29, 2006

UI Seeks Rate Hike in CT

The New Haven Independent:

While most people headed home for the holidays on Thanksgiving Eve last Wednesday, United Illuminating -- at the end of the work day -- released the details of the rate increases it's seeking from state regulators as of Jan. 1. The utility, which sends electricity to 300,000 customers in Greater New Haven and Bridgeport, wants to raise rates for residential customers an average of 38 percent, for businesses, an average of 50 percent.

Connecticut Attorney General Richard Blumenthal called the proposed hike a "tsunami."

But it seems likely that state regulators, at the Department of Public Utility Control, will approve the request when they meet on Dec. 8.

Energy Efficiency

The New York Times:
Under state rate regulation, utilities are compensated for producing energy, but rarely for conserving it. A few states, notably California, allow electric companies to pass through the costs of energy-saving programs, but they are the exceptions.

“With changes in state regulation, we could really stimulate energy efficiency,” said James E. Rogers, chief executive of Duke Energy, a big utility in the Midwest and Southeast.

Energy-saving investments, Mr. Rogers said, would include on-site visits by experts to advise consumers on how to make their homes more energy efficient; pass-through subsidies for the purchase of fluorescent light bulbs; and sophisticated network technology to manage energy use remotely during periods of peak demand.

Water is the New Oil

The Globe & Mail:

In the last three years, U.S.-based water companies — as measured by the Bloomberg U.S. water index — have surged 150 per cent, three times the rise seen by companies on the S&P 500, while paying twice as much in dividends. International water players are doing even better..., with their stock values rising twice as fast as their American counterparts in the past year alone.

Water is an attractive investment because it is much less volatile than industries driven by economic cycles... Companies that specialize in “water solutions” can range from pumps, pipes and valves, wastewater treatment, to quality testing. European companies account for half of the global water players, while American companies make up 36 per cent.

Tuesday, November 28, 2006

NRG Scraps Clean Coal Plant

AP via
A New Jersey-based power company has scrapped plans for a power plant using "clean coal" technology, but is moving ahead with a conventional gas-fired plant to produce electricity.

NRG has canceled plans to build the $1.6 billion power plant in Montville using the coal technology, Ray Long, Northeast region director for the company, said Monday.

Telecom Antitrust at SCOTUS

The case, Bell Atlantic v. Twombly, stems from the deregulation of the telecommunications industry in the 1980s and 1990s, with some experts citing it as the most important antitrust case to reach the Supreme Court in 20 years.

The case involves a 2003 lawsuit on behalf of William Twombly and all individuals in the continental United States who bought local telephone and Internet service between February 1996 and the present.

The suit alleged that the incumbent local telephone companies, or "Baby Bells," illegally conspired to prevent competition by excluding new local phone companies from their territories and agreeing not to compete against each other in each other's markets.

Monday, November 27, 2006

Global Warming at SCOTUS

AP via Hartford Courant:
The U.S. Supreme Court will hear oral arguments Wednesday in a case that Connecticut Attorney General Richard Blumenthal says "nothing less than the survival of the Earth as we know it" is at stake.

The claim might sound comically exaggerated, except that the case is the first about global warming to reach the nation's highest court.

Massachusetts vs. EPA aims to have greenhouse gases, especially carbon dioxide, regulated as pollutants under the Clean Air Act. The case is being brought by a coalition of states, including Connecticut, and some of the highest-profile environmental groups in the country.

Broadwater Gets FERC Approval

The New York Times:

A FEDERAL agency’s finding that the proposed Broadwater Energy floating gas plant in Long Island Sound was needed and would have “limited adverse environmental impacts” has moved the plant closer to approval, but opponents of the project in New York and Connecticut continued to criticize it.

Broadwater, a partnership of the Shell Oil Company and the TransCanada Corporation, said that the finding, by the Federal Energy Regulatory Commission, was a significant advance for the $700 million project, which the company wants to put in operation by 2010. The platform, which would be moored in eastern Long Island Sound about 9 miles from Long Island and 11 miles from Connecticut, would be a terminal for liquefied natural gas.

Wednesday, November 22, 2006

Russia to Raise NatGas Prices

Wall Street Journal (subscription):
Russia will roughly triple low domestic prices for natural gas over the next five years in an effort to cool surging local demand for the fuel and ensure adequate supplies for increasing export commitments, a top Kremlin official said.

The move by the world's largest gas producer should help attract much-needed investment to develop new fields amid steadily rising demand for the clean-burning fuel.

Tuesday, November 21, 2006

Eminent Domain in NH

UPI via LaosNews:
A New Hampshire city is fighting to take by eminent domain property owned by Pennichuck Corp., a utility company.

The city plans to make an offer to buy the company in an apparent attempt to settle the ongoing eminent domain litigation between the parties, the Nashua (N.H.) Telegraph reported over the weekend.

Monday, November 20, 2006

American Electric Power

Akron Beacon-Journal:

Next month, AEP turns 100, marking its founding in Albany, N.Y., as a collection of utilities scattered in Midwestern and Eastern states...

The company dates to the days of Thomas Edison and George Westinghouse and to a time when Americans, at least in urban centers, were being tempted to replace old gas lamps with seemingly magical contraptions wired with electricity.

AT&T Won't Budge

The Wall Street Journal (subscription):

AT&T Inc. expects to get approval of its $80 billion takeover of BellSouth Corp. from the Federal Communications Commission by the end of the year without having to make further concessions...

Negotiations between AT&T and the two FCC Democratic commissioners, Michael Copps and Jonathan Adelstein, who are refusing to vote in favor of the deal, are likely to restart in the next two weeks.

The fact that the company is publicly stating it won't likely make any further concessions in order to win over Commissioners Copps and Adelstein could make those negotiations difficult.

National Grid to Cut Rates

The Providence Journal:

National Grid yesterday proposed lowering electricity rates by about 6.6 percent, which would trim the bill of a typical residential customer by about $5.11 a month.

In a filing submitted to the Public Utilities Commission, National Grid said that declining natural gas and crude oil prices have lowered the projected costs of buying electricity for its customers next year, allowing it to lower rates.

The company proposed that the new rates become effective Jan. 1.

Fluoridation Debate

The Bangor Daily News:
The debate over adding fluoride to public drinking water supplies, a practice that gained broad national support in the 1950s and is still going strong today, never seems to be completely settled.

The Growth of Solar Power

The Washington Post:
Growth in the solar, wind power and biofuel sectors has been fast and promises to be enduring...

"The demand for solar energy is so strong, not only in the United States but around the world, that we have to keep up," Lee Edwards, chief executive of BP Solar, said at a ceremony attended by Maryland politicians, congressional aides, BP employees and a group of local elementary-school pupils.

Many boosters of solar, wind and biofuels have tried to sell them as pieces of a new American economy, but these nascent industries rely on many of the same skills and materials as the old American economy-- and that's good for people looking for jobs.

Saturday, November 18, 2006

Chairman Martin Reconfirmed at FCC

AP via Topix:

The Senate approved the nomination of Federal Communications Commission Chairman Kevin Martin to serve a second five-year term.

Martin, a Republican, has been a commissioner since 2001 and has served as chairman since March 2005.

Friday, November 17, 2006

PA Mercury Rules Advance

Philadelphia Inquirer:

Mercury from coal-fired power plants - currently responsible for the bulk of all mercury emitted in Pennsylvania - is expected to fall by 90 percent over the next nine years under a plan approved yesterday by a state regulatory board.

The plan, vigorously debated for two years and heavily opposed by power plants and mining companies, trumps a weaker federal rule. Pennsylvania would join Illinois as the first major coal-producing states to move beyond the federal limits and make them tougher - if measures to do so in both states become final.

NatGas Exploration Bill (Opinion)

The Wall Street Journal (subscription):

The Gulf of Mexico Energy Security Act, crafted by New Mexico's Pete Domenici, would open 8.3 million acres of the Outer Continental Shelf to oil and natural gas drilling. The bill doesn't go nearly as far as we or many in the House would like, but it's the best opportunity for new U.S. energy exploration in years.

While this Gulf acreage is known to hold oil reserves, the real significance is its bonanza of natural gas. Unlike the global oil market, most natural gas is produced regionally. Short supplies and high prices are punishing American industry, causing plant closures and job flight overseas. It is one of the larger economic messes in recent history, yet the political class barely mentions it -- perhaps because the politicians have done more than anyone to cause it...

Gulf Coast Democrats are supporting this Senate bill, largely because it offers their states a cut of the royalties. The House has passed a much stronger bill, and in a better world would prevail. But with coastal, anti-drilling Democrats set to run Congress next year, now is the time for the House to swallow its pride, pass the Senate version without amendment to avoid a conference, and send it to President Bush.

The 8.3 million acres to be opened in the Senate bill would conservatively yield 5.8 trillion cubic feet of natural gas -- a significant amount under any measure. Moreover, drilling in the Gulf has typically yielded three to five times more oil and gas than originally estimated. With any luck, the money that would start flowing to the Gulf states under revenue-sharing with the feds might also encourage other states to demand their own coastal exploration.

That should continue to be the long-term policy goal, as the outer shelf is estimated to hold an extraordinary 420 trillion cubic feet of natural gas, enough to keep the U.S. in affordable energy for decades. It's a disgrace that Congress has locked up that supply and driven high-paying jobs overseas. Passing this drilling bill would make a lame-duck Congress a little less lame.

Third Quarter EPS for Water Utilities

The chart shows the Earnings per Share of the water utility companies followed by the Seeking Alpha Utilities Blog.

DOJ Defends AT&T Decision


The Justice Department's top antitrust official on Thursday defended the agency's unconditional approval of AT&T's $82 billion buyout of BellSouth Corp. as "pretty straightforward" despite criticism from Democratic regulators and lawmakers.

The buyout would further reunite parts of the old Ma Bell phone monopoly, broken up by the government in 1984, and create the largest U.S. provider of telephone, wireless and broadband Internet services.

"We're living a very different world than we were in the 1980s," Assistant Attorney General Thomas O. Barnett said in an interview during an antitrust conference. "The mere size of a company in general doesn't tell you whether a merger is going to harm consumer welfare."

Thursday, November 16, 2006

NU Transmission Projects

Hartford Courant via Topix:
Northeast Utilities is planning at least $700 million in high-voltage line projects over the next six years in an effort to eliminate costly electricity transmission bottlenecks and improve reliability in southern New England. More than 100 miles of new transmission lines could be built in Connecticut to import electricity from neighboring states and to move power from generation plants in eastern Connecticut to high-demand areas in western Connecticut. The construction would be the latest in a series of high-voltage line projects that NU's subsidiary, Connecticut Light & Power, is undertaking to improve the state's congested electric grid into a system that's more efficient and less costly for ratepayers.

Green Energy Investment

The Economist:
Investors are falling over themselves to finance start-ups in clean technology, especially in energy. Venture Business Research reckons that investment in the field by venture capitalists and private-equity firms has quadrupled in the past two years, from some $500m in 2004 to almost $2 billion so far this year. The share of venture capital going into clean energy is rising rapidly... New Energy Finance, another research firm, reckons that investment of all sorts in the business will reach $63 billion this year, compared with just $30 billion in 2004. The lure of big money is leading investment banks to ramp up their analysis of the latest boom industry.

Equitable Trying to Settle in PA

Pittsburgh Tribune-Review:
Equitable Resources Inc. officials Tuesday were busy negotiating last-minute settlements with parties opposed to its deal to acquire Dominion Peoples Gas, to avert negative testimony at a state Public Utility Commission hearing.
No comprehensive settlement has been reached, so the hearings are going forward.

Constellation IPO

Constellation Energy Partners LLC priced its initial public offering at $21 a share, the top of its $19-$21 range. The stock opened at $21.75 and rose to $22.

The Baltimore-based company raised $94.5 million by offering 4.5 million units.

The partnership formed by Constellation Energy had reduced the size of the IPO from 6.275 million units.

Wednesday, November 15, 2006

Rethinking Utility Mergers

Energy Biz Insider:
The bigger they are, the harder they fall. FPL Group and Constellation Energy have called off their $12.5 billion merger about a month after Exelon Corporation and Public Service Enterprise Group canceled their deal. In both cases, state regulators expressed serious concerns over whether the match ups would be beneficial to all stakeholders...

State regulators have said they do not want to weaken their regulatory oversight and for better or worse, utilities must listen.

EU OKs GdF-Suez Merger

AP via The New York Times:
European Union regulators cleared the $52 billion combination of Suez and Gaz de France after they agreed to sell Belgian units to avoid monopoly control of that country’s gas and electricity market. Suez, a waste and water services company, agreed in February to be acquired by the natural gas distributor Gaz de France in a stock swap. Both companies are based in France. Sabine Wacquez, a spokeswoman for Gaz de France, said the companies would seek shareholders’ approval for the deal before year-end.

Tuesday, November 14, 2006

Buffett Wants More Utilities

Billionaire investor Warren Buffett said Monday in Miami Beach that his Berkshire Hathaway will be on the hunt for more investments in the utility industry.

Speaking at the annual convention of the National Association of Regulatory Commissioners, Buffett said his firm, which already is the controlling shareholder in MidAmerican Energy Holdings Co., would seek other utilities.

Monday, November 13, 2006

Xcel Wants Mandatory Emission Limits

Xcel Energy Inc., once locked in a fight with Colorado environmentalists over renewable energy, now advocates mandatory standards for reducing greenhouse gases, the CEO and president of the state's largest utility said Friday.

Richard Kelly said the Minneapolis-based utility has been talking to politicians and other utilities for a while about a plan to reduce carbon dioxide emissions, which are believed to be contributing to global warming.

GE & Hitachi Nuclear Units to Merge


General Electric and Hitachi will merge their nuclear power businesses, which build new reactors and provide services to owners of old ones, the companies said Monday. The announcement of the deal by the two companies today is another sign of global retrenchment in the industry.

G.E. competes with Westinghouse Electric (now owned by Toshiba) and with Areva, a French-German consortium, to sell reactors in the United States, where nuclear power is getting new attention again because of high oil prices and heightened concerns about dependence on energy imports.

Friday, November 10, 2006

Arsenic Removal

The New York Times:
A common mineral similar to rust fashioned into a powder of tiny crystals could provide a simple, inexpensive method for removing hazardous levels of arsenic from drinking water, researchers at Rice University in Houston are reporting today.

That would help reduce the risk of cancer for tens of millions of impoverished villagers in China and Southeast Asia, where high levels of arsenic occur naturally in many water supplies, the researchers said in telephone interviews.

Arsenic contamination is also a threat to water supplies in parts of Latin America, Africa and the United States, where the Environmental Protection Agency this year reduced allowable arsenic levels in municipal water systems to 10 parts per billion, down from 50 parts per billion.

Thursday, November 09, 2006

The Pluses of Nuclear

Nuclear power can help reduce carbon dioxide emissions and provide reliable electricity in the future, but the technology must first win a battle for public opinion, the International Energy Agency said.

Nuclear power has two main advantages over rival energy sources, the IEA said, namely that it produces no greenhouse gas emissions and only requires uranium as a resource, which is found in abundance in stable, democratic countries.

Monticello License Renewed

St. Cloud Times:
The Monticello nuclear power plant's operating license has been renewed for 20 years, the U.S. Nuclear Regulatory Commission announced Wednesday.

The extension followed a September decision by the Minnesota Public UtilitiesCommission that authorized the Xcel Energy-owned generating plant to store spent nuclear fuel in above-ground casks.

The plant's new license will remain valid until 2030, extending its potential life to at least 60 years. Its original 40-year license had been set to expire in 2010.

Dingell Wants FCC to Wait

NY Newsday:
John Dingell, the incoming chairman of the House Energy and Commerce Committee, said Wednesday he wants the Federal Communications Commission to delay its vote on AT&T Inc.'s acquisition of BellSouth Corp.

Dingell, saying the combination raises a "significant antitrust question, sent a letter to the FCC asking that it hold off on the vote until after the new Congress convenes in January.

Tuesday, November 07, 2006

TXU Commits to Coal

The New York Times:
Even as some utility executives are joining environmentalists in seeing future controls on carbon emissions as inevitable, TXU is betting that it can beat the consensus, placing a $10 billion wager on 11 new coal power plants that will produce copious amounts of global warming gases for decades to come.

[On Monday, TXU announced that in addition to 9,000 megawatts of capacity in Texas, it is considering 7,000 to 14,000 more megawatts of capacity in other parts of the country, possibly including the Northeast and Midwest, which would make it a national player in the industry.]

Saturday, November 04, 2006

MetEd Penelec Rate Decision

Harrisburg Patriot-News:
Two administrative law judges have recommended rejection of a petition from Metropolitan Edison Co. and Pennsylvania Electric Co. to get out from under their electricity rate caps, a move that would have cost their customers $2.25 billion in higher rates over four years.

Whatever financial problems the companies claim to be suffering are of their own making, Wayne L. Weismandel and David A. Salapa said in a 309-page ruling. They are administrative law judges for the state Public Utility Commission.

The judges said testimony from the companies' witness showed that Akron, Ohio-based FirstEnergy, the parent company, was losing little or no money in supplying electricity to its subsidiaries under the rate caps.

Aqua Earnings Down

AP via Centre Daily:
BRYN MAWR, Pa. (AP) - Aqua America Inc. on Wednesday reported that its third-quarter profit fell 2 percent.

The Bryn Mawr-based water utility blamed above-average rainfall and higher expenses.

Net income for the third quarter decreased to $27.3 million, or 21 cents per share, from $27.9 million, or 21 cents per share, in the same period last year.

Aqua America Inc. serves more than 2.5 million residents in Pennsylvania and 12 other states.

Duquesne Acquisition

Pittsburgh Tribune-Review:
Duquesne Light Holdings Inc. said Friday it expects state regulators' approval of its $3 billion acquisition by a consortium of investors by June, three to six months later than originally thought.

The Downtown-based parent of electric utility Duquesne Light Co. announced in July that the group led by Australia's Macquarie Infrastructure Partners had its board's approval to buy all outstanding common stock for $20 a share. Stockholders are to vote at a special meeting Dec. 5.

Friday, November 03, 2006

Verizon TV in NJ

The New York Times:
A New Jersey telephone company, Verizon, sought approval yesterday to offer television in 316 communities. The company said its plan would include 2.1 million homes. Verizon hopes to begin offering the service in late December and have it available to 500,000 homes by March. The State Board of Public Utilities has 45 days to act. For $42.99 per month, Verizon proposes offering nearly 200 digital channels, more than 20 high-definition channels and a video library with 3,000 titles.

AT&T BellSouth Delayed Again
The Federal Communications Commission on Thursday delayed for a third time a vote on whether to allow AT&T to acquire BellSouth--a postponement that's due to the commissioners' inability to agree on conditions of the deal.

The vote was scheduled for Friday during the commission's open meeting. But the agency sent a notice late Thursday removing the item from the agenda.

Wednesday, November 01, 2006

Phone & Cable Companies

The New York Times:
Investors cannot seem to decide what to do with the stocks of phone and cable companies. Last year, they dumped the shares on the hunch that those industries would be hurt as they moved onto each other’s turf...

This year, every major phone and cable stock has risen. BellSouth, for example, is up 66 percent, and Comcast has risen 57 percent. Investors now appear to view the battle for phone, broadband and television customers as something other than a zero-sum equation; perhaps, the thinking goes, cable and phone companies can divide the pie and still prosper.