Amending PUHCA is an essential action that must be taken in order to ensure that adequate and competitively priced supplies of electricity are available in the mid-to-late 1990s.
The Department of Energy, as well as independent analysis, concludes that to meet growing demand, America's electric utilities will need an additional 100,OOO mega watts to 150,000 megawatts of electricity in the 199Os, the equivalent of 100 to 150 large generating plants. Without this power the country is headed for electricity shortages, despite substantial conservation initiatives. But all of this new capacity will not be built by the nation's traditional electric suppliers, the electric utilities.
Many of these utilities have been financially hurt by major power plant projects in the past, some of them nuclear, because they were unable to recapture their investment, much less earn a profit. Such disallowances have beenestimatedashigh as $13 billion-about 10 percent of all utility capital investments made since 1985.
Furthermore, many state public utility commissions are now espousing or requiringnew concepts such as integratedresource planning, least-cost power planning, and competitive bidding strategies. The implication of these new policies is clear: traditional rate-based power plant investments can no longer be presumed to be prudent. . . . many state public utility commissions are now espousing or requiring new concepts such as integrated resource planning, least-costpo werplanning, and competitive bidding strategies. The implication of these new policies is clear: traditional rate-basedpowerplant investments can no longer be presumed to be prudent. William T. McConnick, Jr., is chairman and chief executive offier of CMS Energy Corporation, of Dearborn, MI.