Inflation: its significance for public utilities

Journal Article · Thu Mar 03 04:00:00 EST 1977 · Public Util. Fortn.; (United States)

OSTI ID:7306129

Harriss, C L

Public utilities are particularly influenced by inflation because of their dependence on long-lived capital, their need for substantial amounts of new capital, and government regulations. The author analyzes inflation in terms of relative buying power and the general level of prices. Inflation is seen as largely a result of excessive money created for various purposes, such as the financing of wars and budget deficits and for expenditure growth for social services and economic development. Recent events have seen a devalued dollar, higher food prices as a result of bad harvests, higher oil prices as a result of the OPEC cartel, and monetary policies in the U.S. and abroad that increased the stock of money--all contributing to inflation. Distortion of price relationships affects the utilities at the expense of bondholders and shareholders, neither of whom are receiving the expected return on their investment. Future financing will suffer unless utilities and their customers are willing to pay the cost needed to attract capital. Consumers and taxes are the beneficiaries of utility regulation, while plant facilities, retirement plans, and pension programs will suffer from the effects of inflation. (DCK)

• Research Organization: Columbia Univ., New York
• OSTI ID: 7306129
• Journal Information: Public Util. Fortn.; (United States), Journal Name: Public Util. Fortn.; (United States) Vol. 99:5; ISSN PUFNA
• Country of Publication: United States
• Language: English

Related Subjects

20 FOSSIL-FUELED POWER PLANTS
200106 -- Fossil-Fueled Power Plants-- Economics
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200* -- Energy Planning & Policy-- Economics & Sociology
293000 -- Energy Planning & Policy-- Policy
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