Electricity pricing and the financial health of electric utilities in the United States. Final report
The electric utility industry in the United States is characterized by wide diversity in utility ownership, management, cost structure, and regulation. There are approxiately 240 investor-owned utilities in the US. There are more than 1900 government utilities in the US. There are more than 50 regulatory commissions which regulate retail prices to ultimate customers. This substantial diversity in regulatory policies, processes, and rules applied to utilities across the country as well as significant regional variations in costs results in a wide variation in electricity prices and financial health among utilities. Prices and financial conditions for the industry as a whole also have varied substantially over time. During the 1960s, utilities were financially healthy, and real electricity prices were falling. In the decade following the Arab oil embargo in 1973, however, the industry was characterized by poor financial health and rapidly rising prices, although the reasons for these conditions varied somewhat between the first part of the decade and the last few years (1980-82) of the decade. Improved economic conditions during 1983 have contributed to improved utility financial health. A continuation of these economic conditions would result in continued financial stability for most utilties. Some individual utilities - particularly those with large constuction programs and those facing substantial reductions in the demand for electricity - may continue to exhibit financial problems. Utilities that have attempted to complete large nuclear projects during the presence of sharply declining load growth face severe financial problems. Prospects for the future financial health of the industry depend critically on the future demand for electricity, requirements for new generating capacity and other utility investments, and resolution of several policy issues affecting utility ratemaking, operations, and financial accounting.
- Research Organization:
- ICF, Inc., Washington, DC (USA)
- DOE Contract Number:
- FG01-84IE10372
- OSTI ID:
- 5429973
- Report Number(s):
- DOE/IE/10372-T1; ON: DE85014875
- Resource Relation:
- Other Information: Portions of this document are illegible in microfiche products
- Country of Publication:
- United States
- Language:
- English
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