LOS ANGELES - Joint power agencies "have had mixed success" in selling lower-cost wholesale power to retail customers, Moody's Investors Service says in a report released yesterday.

The Moody's survey of 25 joint power agencies says that I I agencies had higher average electric rates than competing investor-owned utilities, and higher rates compared with the state average. Fourteen agencies had lower rates than the competing utilities, and lower rates compared with the state average. Rates were measured by average revenue per kilowatt hour.

Findings contained in the 14-page report were presented yesterday by Dan Aschenbach, a vice president for Moody's public finance department, to 62 attendees of the Joint Action Agency Workshop sponsored by the American Public Power Association. The annual workshop was held Sunday, Monday and Tuesday in Santa Fe, N. M

Joint power agencies - also called joint action agencies - became popular in the 1970s as a way for groups of municipal electric distribution systems to finance "large scale, base load power" systems that individually they cotuld not build, own, or operate economically, the report says.

The American Public Power Association says 66 joint action agencies nationwide sell wholesale power. Moody's rates 33 of the agencies in 25 states which have issued nearly $39.6 billion in insured and noninsured debt. Moody's rates nearly 93% of joint power agency debt single-A or higher, and the credit trend is stable, the report says.

The report says except for refundings, these agencies expect minimal new borrowings in the near future.

"Our survey has concluded that [joint power agencies] have generally been successful in ensuring reliable power for participants, and they are well-positioned with their current power supply to meet projected demands through the year 2000," the report says.

The report says the continued ability of joint power agencies "to respond to the changing [market] conditions, particularly in the new competitive environment, will be strongly tested and will be an important element of future credit quality."

"The impact of increasing competition" on participants in joint power agencies could affect the retail rates they charge, and such competition "may be a major long-term credit concern," the report says.

As competitive increases, however, joint power agencies have "usually succeeded" in providing their members with a reliable source of power, the report says. The power sources are obtained "through ownership of power sources, arrangement for additional power purchases with project co-owners, or through supplemental purchases with other utilities," the report says.

While some joint power agencies ~have substantial surplus power and have been able to efficiently remarket it because of their comparatively lower costs," other agencies cannot economically remarket their excess power because of high fixed costs, the report says.

The report says the Washington Public Power Supply System had to cancel construction of four of five nuclear plants, "partly due to lower-than-expected demand in the Pacific Northwest." High debt service costs related to more than $6.7 billion of bonds issued for the WPPSS net billed nuclear projects contributed to more expensive power costs and rates than originally forecast. But rates charged to WPPSS participants "remain among the lowest in the nation due to the substantial amount of power from lower-cost hydroelectric facilities," the report says.

In a related Moody's report released Dec. 1, Moody's discusses retail wheeling which it describes as the "transmission of power through a utility's transmission lines to an ultimate customer, bypassing the local utility."

The report says retail wheeling is becoming an increasingly likely prospect to add "potential vulnerability to the long-term credit position of certain municipal electric utilities."

Retail wheeling "appears to be the next step in the emerging competitive marketplace," the report says. "Retail wheeling would allow electric customers to completely bypass local utilities and purchase lower cost electricity from other suppliers."

As a result, the report says major commercial or industrial customers "would be able to shop for the lowest cost power supply anywhere. The existing rate differentials between utilities form the battleground of a more intense competitive marketplace."

A catalyst for the more competitive environment was the National Energy Policy Act of 1992, which "opened the door further to competition in the wholesale market, making transmission access easier for utilities to wheel bulk power through other utilities' transmission systems," the report says.

While "limited forms" of retail wheeling are currently permitted in Connecticut, Nevada, New York, and Utah, the report says "pressures to open up the marketplace even further are beginning to represent the major debate in the industry."

The Michigan Public Service Commission is expected to rule soon on an industrial consortium's request to bypass a local utility to purchase power from lower-cost, out-of-state producers, the report says. New Mexico's Legislature is expected to decide its policy on retail wheeling after completion of a two-year study, the report says. Two bills to allow retail wheeling in Massachusetts are now pending in the state's General Court.

Utilities dominated by a major commercial or industrial customer are especially exposed to credit concerns. If rates are high and retail wheeling is permitted, "the retail customer could be won over by competitors, resulting in financial strain for the utility," the report says.

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