The state’s big investor-owned utilities, aptly nicknamed IOUs, are in big trouble—and Wall Street knows it. Historically, the IOUs have been able to block damaging legislation calling for the deregulation of electricity and immediate rate cuts, but the once-friendly Public Utility Commission has turned against them. In a sweeping and unexpected decision in late March, the PUC tried to speed the deregulation process by rejecting Central Power and Light’s request for a $70 million rate increase, ordering a $30 million rate decrease instead, and slashing the company’s rate of return on a portion of its investment from 9.8 percent to 7.96 percent. The stock of CP&L’s parent company, which was trading at $28 a share as late as January, has dropped almost eight points; the stock of the companies that own Houston Lighting and Power and Texas Utilities has suffered declines as well. Utility lawyers insist that the PUC has no authority to force deregulation, but proving it in court could take years. Meanwhile, if the companies’ stock drops much lower, the IOUs could be takeover targets—so it is entirely possible that Texas-owned utility companies may go the way of Texas-owned banks, with the potential loss of regional independence, corporate headquarters, and thousands of jobs.