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To: Roads End who wrote (39042)	12/7/1998 3:26:00 PM
From: rupert1	Read Replies (1) \| Respond to of 97611

Steve: ++++++++++0T++++++++++++ I saw the interview today. The strategy here has been to acquire a nationalised utility and operate it under a regulator who is empowered by Parliament. The franchises were divided regionally. In their region the original franchises were virtual monopolies for a while. The original legislation provided for the gradual introduction of competition but only after the original franchisees had developed profits enough to build and repair infrastructure and satisfy shareholders. By and large they did a good job. The next stage was when some of the original franchisees bought out plc's (public listed companies) in allied sectors. For example, the original natural gas franchisees would buy out the original electricty franchisee. This has caused some consternation in the UK because of the obvious scope it gives to control energy prices in a region. It was allowed because the case for cost-cuttng at the administrative level was very strong and because the two sectors - gas and electricity - had separate regulators who would, theoretically, be able ensure that this did not happen. Many of the first executives in the UK franchisees were American. The companies have made lots of money for shareholders. They seek expansion in the US and elsewhere. But it should be noted that they had peculiarly favourable business conditions in the UK. I do not have a detailed knowledge of the Scottish set-up, but I know it follows these same structural principles I will keep an eye out for anything on the Oregon deal in the UK financial press and let you know. Victor