Are LDC marketing units an endangered species?
Local distribution company (LDC) marketing affiliates are an ``endangered species,`` according to consultant Porter Bennett, president of Bentek Energy Research. This is true, he says, because the gas marketing industry is ``rapidly becoming a large-volume, low-margin business.`` As a result, the need for economies of scale will produce mergers in the gas marketing business until all that`s left are six or 12 national companies. But Bruce Henning, A.G.A.`s chief economist, says don`t bury LDC marketing units yet. Though he agrees that ``there is increasing pressure on marketers of energy services to reduce their margins to remain competitive,`` he adds that ``it`s hard to say how big a company will have to be to capture the economies of scale necessary to be effective.`` These differing views are discussed in terms of size of company, the concerns about retail markets, and the trends towards mergers.
- OSTI ID:
- 131733
- Journal Information:
- American Gas, Vol. 77, Issue 9; Other Information: PBD: Oct 1995
- Country of Publication:
- United States
- Language:
- English
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