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California Power Re-Regulation Risk: Price Caps, Rebates, and Lawsuits Jun 01
Standard & Poors, June 2001
Abstract
(Editor's note: The following article is a revised version of a previously published article.) Independent power producers, energy marketers, utilities, lenders, and other investors are clearly at risk of regulation as California works its way through its power crisis. While working toward a sustainable solution that would correct a structurally flawed market, short-term fixes are being proposed. The latest calls for caps on wholesale electricity prices and generator rebates, as well as threats of litigation, could exacerbate a bad situation for the power producers. If any, or all, of these proposals appear in a material form, lenders, generators, and the U.S. electricity industry at large may face the real risk of re-regulation. Trying to do business against shifting political and...
Companies mentioned in this report are: Duke Energy Corp.,Williams Cos. Inc. (The),CenterPoint Energy Houston Electric LLC,Enron Corp.,AES Corp. (The),Calpine Corp.,Dynegy Inc.,Mirant Americas Generating LLC
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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