Blueprint for future of gas and electric distribution companies includes over 200 consensus-based findings

WASHINGTON, May 9, 2002 — After a year of deliberations, the Center for the Advancement of Energy Markets (CAEM) has released the final report of its Distribution Company of the Future Forum.

The forum, made up of approximately 50 stakeholder organizations representing the industry and its regulators, examined financial and competitive issues facing electric and gas distribution companies.

CAEM convened the forum in the light of such events and issues as:

* PG&E, the largest distribution company in the United States, filing for bankruptcy as a result of California’s electric crisis.
* The recent collapse of Enron, which raised questions about the impact of deregulation and competition on companies’ financial health.
* The lack of a consensus model for how competitive energy reforms will affect distribution companies.

CAEM President Jamie Wimberly said that given the consensus-driven framework of the forum and its in-depth examination of the issues facing gas and electric distribution companies, the final report is the only document of its kind and is expected to make a major contribution to policy-making in relation to gas and electric distribution companies.

“With increased competition in the electric and gas sectors and the broad movement toward unbundling or disaggregating the distribution (the pipes and wires to homes and businesses) end of the business from a vertically integrated company structure, distribution companies are facing growing uncertainty and risk,” Wimberly said. “On the other hand, a number of opportunities are arising for these companies.

“The primary purpose of the forum was to thoroughly examine the issues and challenges facing distribution companies and to make consensus-based recommendations that work to ensure healthy companies and happy customers in the future,” he added. “There is no question much more needs to be discussed and debated, particularly the role of the regulated utility in the provision of new product offerings and services, but the final report is a substantial achievement.”

The report contains over 170 pages of analysis, six guiding principles, 170 findings and 100 recommendations. CAEM has made the report available to the public at no charge; it can be found by going to http://www.caem.org.

CAEM is a nonprofit think tank founded in 1999 to promote market-oriented solutions to the challenges that confront the energy industry, other network industries and the nation. It is not a trade association, consulting firm or lobbying group, but a think tank developing intellectual capital for the movement toward new public policies and regulations, new business models and new technologies driven by competitive energy models.

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