Understanding the effect of reclassifying electric plants is

important when reviewing utility or nonutility data. Since

January 1998, many electric utilities have been in the

process of selling their electric plants or spinning them off

into unregulated subsidiaries as they prepare for restructuring.

Among the most prominent reasons for divestiture

are the following: State restructuring laws that require the

sale of plants in order to enhance competition, sales made

to recoup stranded costs, sales to exit the generating

business, or for the purpose of spinning-off the assets into

an unregulated subsidiary. Prior to the sale or spin-off,

plant specific data is recorded under the utility sector. Once

the divestiture is complete, subsequent data collected by the

EIA is recorded under the nonutility sector. The result is

that tables containing generation, consumption, stocks, and

receipt data often show a year-to-year decrease in utility

data and a similar increase in year-to-year nonutility data.

The reclassification has no affect on industry level data.

The breakdown of utility versus nonutility data is made

available to help showthe transition of the industry from a

regulated business (utility) to that of an unregulated

business (nonutility).

Perhaps the least noticeable but one of the most important

affects of reclassification on data presented in this publication

can be found in the fuel cost data presented in Table

A20. Restructuring has allowed many plants to escape

reporting data on the Federal Energy Regulatory Commission

(FERC) Form 423 survey. In doing so, data at the

State, Census division, and National level have been

affected by the elimination of respondents from the survey.

Depending on the price of fuel delivered to a specific plant,

its removal from the database can substantially change the

weighted average cost of fuel shown for a particular State.

Data on the cost of fuel collected on this survey have

historically been used by many industry participants as

part of an index to adjust the price of fuel delivered under

contracts. The use of these data should be reviewed to

determine the affect that reclassification and subsequent

removal of plants from the database have on the index.