Winning in the emerging energy services business
- McKinsey & Co., Washington, DC (United States)
- McKinsey & Co., Cleveland, OH (United States)
- McKinsey & Co., San Francisco, CA (United States)
The energy services industry is about to experience major changes, driven largely by new customer needs and the push by existing players and new entrants to respond to those needs. The experience of other industries that have gone through similar changes suggests that initiative and prompt action in developing strategies and capabilities will pay off handsomely. As companies of all kinds are looking for alternatives to traditional utility services, new suppliers are stepping in to meet some of their needs. Well over 200 new entrants have filed the necessary FERC paperwork to become {open_quote}power{close_quote} marketers,` including potentially powerful players such as major oil companies (e.g., Amoco), gas marketers (e.g., Enron, Coastal, Clearinghouse), and Wall Street firms (e.g., Morgan Stanley, AIG). Indeed, some intriguing alliances (e.g., Duke/Louis Drefus, Shell/Tejas/Bankers Trust) have emerged to bring together complementary skills for attacking this emerging opportunity. All this activity is but a surface-level indicator of a sea change in the utilities business, with huge implications for incumbent players. Playing to win will require a fundamental shift in business mindset, from a service-area-focused, regulation-driven, vertically integrated utility to a regional/national-market-focused, customer-driven, energy services company. Those utilities who move quickly and effectively to implement the new paradigm could emerge as the energy services providers of the future, with an opportunity to play in a competitive but much larger energy services market. Those who don`t will likely end up being bought or restructured, or simply hanging on as regulated commodity distributors.
- OSTI ID:
- 447680
- Journal Information:
- Electricity Journal, Vol. 9, Issue 7; Other Information: PBD: Aug-Sep 1996
- Country of Publication:
- United States
- Language:
- English
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