Utilities

A Van Nuys lawmaker is pushing a bill that would authorize regulators to hit the Los Angeles Department of Water and Power and other municipal utilities with millions of dollars in charges if they fail to meet energy efficiency targets.

"Power Plants Put on Hold" (July 30) makes me wonder what we are all waiting for in the energy business. It seems clear from this article and many others that the deregulated energy market does not work as presently designed. So we have two choices: Step back to something more like the old system or move forward into true deregulation of energy. We seem stuck with one foot in the old system and one in the new. It seems clear to me that we don't have the political grit to truly deregulate and trust the marketplace to get our power supplies and prices right.

Two big utilities announced plans Monday to buy neighboring power companies, speeding the consolidation of an industry that has found itself fighting for customers. Philadelphia-based Peco Energy Co. is threatening a $3.8-billion hostile takeover of PP&L Resources Inc. of Allentown, Pa. And, in a friendly deal, Union Electric Co. of St. Louis said it has an agreement to buy Central Illinois Public Service Co. of Springfield, Ill., for $1.2 billion.

Electric utility stocks are in a downward spiral, and that's raising two of Wall Street's least favorite questions: Have interest rates bottomed? And is the bull market on its last legs? The Dow utility stock index sank 1.45 points to 241.76 on Tuesday, its lowest close since late June. The index has lost 5.7% since peaking at 256.46 in mid-September, while most other major stock indexes have either moved sideways or run up to new highs.

All of this talk about Southern California Edison and PG&E possibly facing bankruptcy is viewed as a catastrophe for Californians. I don't see how that can be. What will happen if these two utilities enter bankruptcy? As I view it, they will be given a breathing spell from their creditors and, barring an adequate financial resolution with these lenders, will eventually be forced to turn over their assets to them--just as you or I would be required to do should we face similar financial hardships.

In a move that reflects a renewed focus on local control of electric power, the city of Burbank is building a 250-megawatt generating plant and sharing its $200-million cost--and the electricity it will produce--with Glendale, Pasadena, Cerritos and San Marcos. This unprecedented pooling of resources by medium-sized cities is a reaction to the chaos that electric power deregulation has brought to California's power system.

A local utilities company is entering into an unusual partnership with a hospital association to finance and encourage energy efficiency improvements, reports Energy User News magazine. The company has issued a $111 million capital-grant revolving loan fund with loans up to $200,000 per hospital available at zero interest for terms of up to eight years to members of the Connecticut Hospital Assn.

There's an ancient principle to the effect that even if you're the unwitting recipient of an undeserved bonanza -- say a bank mistakenly funnels a million bucks of someone else's money into your ATM account -- you can't keep the money. Apparently this notion hasn't registered at the Los Angeles Department of Water and Power.

After much debate and delay, City Council members Tuesday night repealed the controversial utility tax that caused the ouster of the three council members who voted to levy it. "It's time," Mayor Julie Sa said. "We have to repeal the tax tonight. It's time to get rid of the tax, forget about it and start concentrating on 1995." Sa publicly apologized for the county's financial crisis and then urged residents to help the city overcome any difficulties by volunteering their services.

The City Council voted Tuesday to delay a vote on proposed water and electricity rate hikes until late February -- after voters decide the fate of a $243-million telephone utility users tax. Council members said they wanted more answers from newly hired DWP General Manager H. David Nahai on the utility's efforts to address staffing shortages and fix aging infrastructure.