Today's utility business (or, Boy Scouts in the Temple of Mammon)

Journal Article · Tue Jun 01 04:00:00 EDT 1993 · Electricity Journal; (United States)

DOI:https://doi.org/10.1016/1040-6190(93)90134-7· OSTI ID:5735963

Hyman, L S

In the good old days of monopoly, it didn't matter so much how assets or liabilities were carried on the books. Today it matters very much. But in today's competitive environment it is even more important that utilities have a corporate strategy that takes advantage of their assets and is sensitive to both their customers and their competitors. In the good old days, electric utilities were natural monopolies. Regulators substituted their judgments for those of the marketplace, the utility's engineers managed the production process, its lawyers managed the regulators, and nobody managed the utility as a business. The utility was not a business. It was a quasi-governmental public service institution that - incidentally - threw off an ever-increasing dividend stream to shareholders who thought that they had purchased the equivalent of a bond that had an attached inflation hedge. The good old days are gone. The business is becoming a real one. Customers have choices. Yet the utility's accounting, managerial, and regulatory policies are rooted in the precepts of the old natural monopoly: the utility will always be the cheapest source of electricity, and customers will always need electricity.

• OSTI ID: 5735963
• Journal Information: Electricity Journal; (United States), Journal Name: Electricity Journal; (United States) Vol. 6:5; ISSN ELEJE4; ISSN 1040-6190
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
296000* -- Energy Planning & Policy-- Electric Power
ACCOUNTING
BUSINESS
COMPETITION
ELECTRIC POWER INDUSTRY
INDUSTRY
MARKET
MONOPOLIES