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Wednesday, December 26, 2012

Electric/natural gas deregulation ... fail!


Electric and natural gas utility deregulation: A Case Study/History of a late 20th Century Phenomenon -- From Riches to Rags

Here is a time line that demonstrates everything that was wrong about deregulation of the USA electric and natural gas utility industries. Deregulation was the great bugaboo of the neo-cons: the world would be remade into a paradise if we would only allow companies complete freedom to do whatever they wanted.

Not only did a LOT of money get wasted in these senseless mergers, acquisitions, IPOs and divestitures; a lot of people lost their jobs as well as their retirement pensions; local economies were saddled and burdened with terrible uneconomic costs; but ... a few millionaires got richer (hurrah for rich! they got richer!)

Read, weep, and then pity the millionaire investment bankers who wrecked the economy of the United States, the largest most productive economy this world has ever seen.

Here is a time line describing the destruction of Aquila and UtiliCorp (thank you Black Hills Energy for producing and preserving this case history).

2008
On July 14, Aquila announces that the company has been sold in two separate transactions. Black Hills Corporation acquires the company's natural gas properties in Colorado, Iowa, Kansas and Nebraska, and its electric properties in Colorado. Aquila's electric properties in Missouri are merged into a subsidiary of Great Plains Energy.

2007
In February, Aquila announces the pending sale of the company in two separate transactions. In these transaction, the company's Missouri electric properties will be merged into a subsidiary of Great Plains Energy. Black Hills Corp. will acquire the company's electric properties in Colorado and its natural gas properties in Colorado, Iowa, Kansas and Nebraska.

2006
Aquila completes sale of its Missouri natural gas distribution operations to the Empire District Gas Co., part of The Empire District Electric Co.; the sale of its Minnesota and Michigan gas operations to WPS Resources Corporation; the sale of its Kansas electric properties to Mid-Kansas Electric Company (MKEC), and the sale of its Kansas City area Everest cable, broadband Internet and telephone business to a private investment firm.
Aquila completes sale two merchant peaking facilities.

2005
Aquila agrees to sell selected utility assets in transactions totaling $896.7 million.
Aquila completes exchange offer for premium income equity securities.
Aquila outlines further repositioning initiatives; considers sale of select utility properties.

2004
Aquila completes refinancing
Aquila completes sale of common stock and convertible senior notes.
Aquila completes sale of Canadian utility operations.
Aquila completes sale of 12 independent power plants to Arclight Capital Partners.
Aquila completes sale of its interest in Midlands Electricity in the United Kingdom.

2003
Aquila sells remaining interest in Australia properties.
Aquila sells remaining interest in Quanta Services.

2002
Aquila suspends dividend, exits wholesale energy marketing and trading business.
Aquila sells nearly $1 billion in non-strategic assets, including UnitedNetworks (New Zealand), Texas and Mid-Continent natural gas pipeline systems and natural gas/gas liquids processing assets, and California and United Kingdom gas storage.
Aquila completes concurrent equity and debt offerings.
Aquila purchases Midlands Electricity, fourth-largest regional electric company in the United Kingdom.
UtiliCorp changes name to Aquila, Inc. and adopts ILA as stock symbol.
UtiliCorp merges Aquila back into UCU.

ENRON IMPLODES -- By November 2011 Enron's stock is worthless -- it took 11 months for the  value of 1 share of Enron to drop from $84 to $0.61 (sixty-one cents). The following month, Aquila falls apart.

2001
Aquila Energy changes name to Aquila, Inc.
UtiliCorp launches initial public offering of 20 percent of Aquila.
Aquila breaks ground on 334-megawatt Raccoon Creek Energy Center in Flora, Ill.
Aquila breaks ground on 320-megawatt Crossroads Energy Center in Clarksdale, Miss.
Aquila buys $220 million natural gas storage facility in Lodi, Calif.

2000
UtiliCorp announces record 1999 sales of $18.6 billion and third straight year of 8 percent growth in earnings per share.
UtiliCorp announces agreement to acquire distribution and retail businesses of TransAlta Corp. in Alberta, Canada, involving 350,000 electricity customers.
Aquila Energy helps form IntercontinentalExchange trading platform.
Aquila Energy acquires GPU International.
UtiliCorp acquires St. Joseph Light & Power in Missouri.

1999
UtiliCorp acquires TrustPower assets in New Zealand.
UtiliCorp consolidates all New Zealand assets under one new name -- UnitedNetworks.
UtiliCorp acquires a 25 percent stake in Multinet/Ikon in Victoria, Australia.
UtiliCorp acquires a 40-acre coal-handling facility in West Virginia.
UtiliCorp acquires all of the 18 percent of AQP common stock held by the public.
Aquila Energy operations move to Kansas City.
UtiliCorp acquires 26 percent equity interest in Quanta Services.
UtiliCorp acquires 27.2 billion cubic-foot subsurface gas storage facility in Katy, Texas.
Aquila Energy breaks ground on 580-megawatt generating facility in Missouri.
UtiliCorp sells West Virginia natural gas and electric distribution assets to Allegheny.
Aquila Energy opens offices in Scandinavia, Germany and Spain to compete in deregulating energy markets on the European continent.

1998
United Energy sells 42 percent of its common stock to the public. As a result UtiliCorp's ownership percentage was reduced from 49.9 to 34 percent, after buying another 5 percent from a partner.
UtiliCorp acquires 78.6 percent ownership of Power New Zealand and concurrently sells the 39.6 percent interest in WEL Energy Group.
UtiliCorp acquires TransAlta lines assets in New Zealand and concurrently sells the Power New Zealand retail business to TransAlta.

1997
UtiliCorp restructures its U.K. operations to focus on the niche market of gas aggregation and related wholesale services.

1996
In January, UtiliCorp announces an agreement to merge with Kansas City Power & Light Company. In September, the company terminates the agreement.
Aquila Energy acquires 40 percent of Oasis pipeline.
Aquila Energy begins trading gas in Canada.

1995
Aquila Gas Pipeline acquires Tristar Gas Company.
UtiliCorp acquires 49.9 percent ownership of United Energy in Melbourne, Australia.
UtiliCorp creates EnergyOne, the first national portfolio of energy services in America.

1994
UtiliCorp acquires the Kansas gas and transmission assets of Arkla.

1993
UtiliCorp acquires the Nebraska gas distribution and transmission assets of Arkla.
IPO of 18 percent of Aquila Energy's gas gathering and processing assets - Aquila Gas Pipeline Corporation.
UtiliCorp begins acquisition of 39.6 percent of WEL Energy Group in New Zealand.

1991
UtiliCorp begins operations in the United Kingdom with gas marketing joint ventures with regional electric companies.
Aquila acquires Clajon Holdings, L.P. and combines all of its gas gathering, pipeline and processing facilities in Texas and Oklahoma to form Aquila Gas Pipeline Corporation.

1990
UtiliCorp acquires West Virginia Power Gas Service.
UtiliCorp acquires WestPlains Energy.
Aquila acquires the Mooreland Pipeline assets and the Elk City Natural Gas Gathering and Processing assets from Velero.

1989
UtiliCorp acquires Michigan Gas Utilities.

1987
UtiliCorp acquires West Virginia Power.
UtiliCorp acquires its first international property -- West Kootenay Power in British Columbia, Canada.

1986
UtiliCorp acquires Peoples Natural Gas.
UtiliCorp acquires Northern Minnesota Utilities.
Aquila Energy is made a wholly-owned subsidiary of UtiliCorp.
UtilCo Group is formed to invest in independent power projects.

1985
The company changes its name to UtiliCorp United, Inc. to reflect the numerous areas of the country being served.

1984
The company acquires Kansas Public Service.

1954
Missouri Public Service revenues reach $10 million, up nearly 700 percent from 1940. The company continues to grow and prosper through service expansion and utility acquisitions.

1927
West Missouri Power Company merges with Missouri Public Service Company.

1922
The company goes public and changes its name to West Missouri Power Company.

1917
Green Light and Power Company is formed.

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