Consider forward-looking policies despite stay of new rule

Update courtesy of Utility Regulatory News #4055: In acknowledgement that at some point new power plant emissions strictures are going to be implemented and enforced, the Indiana Utility Regulatory Commission and the Missouri Public Service Commission have laid the groundwork for compliance with those regulations, even though the new rules have been temporarily stayed by a federal appeals court. The two commissions focused on the Cross-State Air Pollution Rule (CSAPR), released by the U.S. Environmental Protection Agency in July. The CSAPR sets forth a schedule of state-specific limits on emissions of nitrogen oxide (NOx) and sulfur dioxide (SO₂) from electric generation facilities, and also provides an aggressive timeline for achieving the required reductions in NOx and SO₂. Although cognizant that the CSAPR was under appeal, the Indiana commission afforded Northern Indiana Public Service Co. special rate-making treatment for the recovery of costs incurred in planning for and initiating certain associated plant improvements and pollution control construction projects. The Missouri commission likewise addressed preliminary strategies for complying with the CSAPR, granting Ameren Missouri authority to engage in a form of emissions trading. Under that plan, Ameren would be permitted to exchange excess SO₂ allowances for a number of NOx allowances sufficient to satisfy the CSAPR requirements. Both commissions reasoned that regardless of any temporary stay of the regulations, it is inevitable that new emissions limits will eventually become mandatory. For the full story, subscribe to URN.

Posted: January 30th, 2012 under generation, regulation.
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Cites complexity of issues raised

Update courtesy of Utility Regulatory News #4054: Careful to stress that its ruling should not be taken as an indication of its opinion on the merits, the U.S. Court of Appeals for the District of Columbia Circuit has temporarily halted implementation of the U.S. Environmental Protection Agency’s (EPA’s) new Cross-State Air Pollution Rule (CSAPR). The CSAPR, issued in July 2011 but modified by the EPA itself just three months later, was crafted to address complaints by certain states that toxic emissions emanating from power plants in upwind states were wafting over downwind states. The CSAPR applies to 27 states and sets forth an aggressive timeline for decreases in such pollutants as nitrous oxide and sulfur dioxide. Various states, electric utilities, and industrial groups appealed the rule, however, arguing that the compressed schedule for compliance and the extent of the emission reductions required would cause irreparable economic harm and could jeopardize service reliability. The court found that the petitioners had met the evidentiary threshold for a stay, and it agreed with them that the issues surrounding their appeal should be formally designated as “complex.” For the full story, subscribe to URN.

Posted: January 27th, 2012 under regulation.
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DEADLINE: Friday, Sept. 30, 5:00 p.m. Eastern time

Fortnightly has opened the nominations process for this year’s Top Utility Lawyers honors.

You’ll find the nomination form here …
And the FAQ document here …
And last year’s Top Lawyers article here.

Nominations are invited from executives at utility and energy companies, regulatory agencies, and trade associations serving the U.S. electric and gas industries. Eligible nominees include attorneys at law firms and private practices, as well as in-house counsel. Nominations from law firms, self-nominations, and intra-company nominations are considered on an informational basis only and will not be counted as votes.

Thanks for your nominations!

Posted: September 26th, 2011 under energy policy, finance, regulation.
Comments: none

Few customers, negotiated rates don’t factor into definition

Update courtesy of Utility Regulatory News #4036: Although acknowledging that a natural gas gathering and transportation company would be serving only a very small, defined group of customers, the Pennsylvania Public Utility Commission nevertheless has affirmed an earlier ruling in which it determined that the company, Laser Northeast Gathering Co., fell within the definition of a “public utility” under state law. The commission said that an entity’s regulatory status depends not on how many or how few customers it serves, but on whether it indiscriminately holds itself out to serve all members of whatever segment of the public it wishes to serve.

The commission observed that Laser Northeast had expressed a willingness to serve any party that desired its services and that it had pledged to expand its capacity, as needed, to meet any growing demand. The commission said its view was not affected by the fact that the company’s services would be provided under individually negotiated contracts rather than pursuant to a schedule of tariffed rates. According to the commission, reliance on separate contracts was not meant to be “exclusionary” or to allow the company to pick and choose its customers, but instead was simply the most efficient way of setting forth terms and conditions of service for customers whose particular needs could vary widely. The commission cautioned, however, that its decision on public utility status was specific to Laser Northeast only and that the commission has no intention of extending such status to all gas gathering companies as a general rule.

Moreover, the commission pointed out that it had not yet been determined whether Laser Northeast would need a formal certificate of public convenience and necessity. That matter is still under consideration, the commission said. For the full story, subscribe to URN.

Posted: September 16th, 2011 under natural gas, regulation.
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Sept. 15, 2011

FOR IMMEDIATE RELEASE

Contact:
Michael Burr

burr@pur.com

320-632-5342
Public Utilities Reports, Inc.

Vienna, Va.: For three years running, Ohio-based utility DPL Inc. has delivered the best overall shareholder performance of any U.S. investor-owned utility company, according to a closely watched report published in the September issue of Public Utilities Fortnightly magazine.

The 7th-annual Fortnightly 40 Report (http://bit.ly/2011F40), sponsored by Accenture, ranked the four-year shareholder value performance of U.S. investor-owned utilities and merchant power companies. The C Three Group of Atlanta, which along with Public Utilities Fortnightly developed the F40 financial model, analyzed the annual reports of 82 power and gas companies to compare a series of shareholder-value metrics — such as profit margin, dividend yield, return on equity, return on assets and sustainable growth.

DPL, parent company of Dayton Power & Light, has held the #1 spot in the Fortnightly 40 report since 2009. DPL’s performance is distinguished by industry-leading returns on equity and assets, as well as strong free cash flow and profit margins. DPL’s perennial strength typifies the top ranks of the F40, according to Michael T. Burr, Fortnightly’s Editor-in-Chief. “Only two names changed in the top 10 ranks. Mirant exited as a result of its merger with RRI Energy, and Questar ascended to #3 by virtue of an asset spin-off,” Burr said. “F40 leaders have shown remarkable stability in performance for shareholders.”

Other movers in the F40 rankings include CLECO, Piedmont Natural Gas, and DTE Energy. DTE’s performance was strengthened by a 10-year program of cost control and operational improvements. In an interview for the report, DTE CFO David Meador told Fortnightly, “Technology deployed right will reduce costs and improve customer service.”

Rankings fell for gas pipeline company EQT and wholesale generator NRG. “EQT was weighed down by heavy spending on shale-gas development, while NRG’s rank was affected by its comparatively low returns on equity and assets,” Burr said.

Companies included in the 2011 F40 ranking include: AES, AGL Resources, Allegheny Energy, Alliant, AEP, Centerpoint, Chesapeake Utilities, CLECO, Delta Natural Gas, Dominion, DPL, DTE, Edison International, El Paso Electric, Energen, Entergy, EQT, Exelon, FirstEnergy, Gas Natural, Laclede, MGE, National Fuel Gas, NextEra, Nicor, Northwest Natural Gas, NRG, NStar, OGE, Piedmont Natural Gas, PPL, PSEG, Questar, RGC Resources, Sempra, South Jersey Industries, Southern Company, Southern Union, TECO, UGI, and WGL Holdings.

The 2011 Fortnightly 40 Report is available to subscribers at www.Fortnightly.com or http://bit.ly/2011F40. Trial subscriptions are available, allowing immediate access to the report.
# # #
PUBLIC UTILITIES FORTNIGHTLY (www.fortnightly.com), published by Public Utilities Reports Inc., in Vienna, Va., is the journal of record for the U.S. utility industry, providing authoritative, in-depth analysis of trends in generation, transmission and distribution of electricity and natural gas. For more than 80 years, Fortnightly has delivered expert analysis to help utility-industry executives and regulators decide where to invest, how the industry will be regulated and what the future holds. Subscription rate: $287/year.

Posted: September 15th, 2011 under M&A, Uncategorized, finance, regulation, utility stocks.
Comments: none