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California's decision to change their utilities regulation strategy to one based on performance-based regulation is being watched closely by the rest of the nation. California adopted retail wheeling to give consumers more choice, hoping to lower prices. The next step was the unbundling of electric services to allow for more targeted marketing, which will allow the market to determine capacity and promote conservation. It remains to be seen if the industry can remain vertically integrated in such a marketplace., The California Public Utilities Commission (CPUC) issued an order on April 20 proposing radical reform of the state's utility regulation. Specifically, the order would replace traditional cost-of-service regulation with competition [...]

Regulators should not exert least-cost and spot pricing demands on the public utilities market without allowing incentives for long-term, fixed-price contracts. Regulators should pursue unbundled services and rely on deregulated market forces to govern the utilities market. Long-term contracts should be preapproved and incentives, rather than regulations, should be used to achieve efficiency of cost and production. Absolute reliance on spot-pricing could lead to extreme fluctuations in pricing and would dissuade long-term investments., A trio of tenets state regulators can use to maximize benefits from natural gas and emission allowance markets. A DRAMATIC CHANGE HAS OCCURRED IN RECENT YEARS IN THE ROLE MARKETS [...]

Deregulation in the public utilities industry could follow the same patterns set by the deregulation of the telecommunications industry. Vertically integrated companies have become a target of divestiture, and independent power producers (IPPs) have been allowed into the electric utilities market the way that regional holding companies (RHCs) were established in the telecommunications market. The government continues to restrict competition between IPPs, RHCs and the more institutional service providers in their industries. However, their competition with one another is becoming more prevalent., IN THE MAJOR INDUSTRIES HISTORICALLY CLASSIFIED AS PUBLIC UTILITY, COMPETITION, PROMOTED BY A VARIETY OF GOVERNMENT POLICIES, IS NOW A PERVASIVE INFLUENCE. A decade ago, antitrust law enforcers consummated a [...]

Deregulation in the public utilities industry has brought a host of benefits. Rates have dropped due in part to the increased efficiency, investment risk has shifted from ratepayers to developers and technological innovations have allowed for greater environmental awareness. However, power purchasing arrangements continue to hamper the deregulation process, and a lack of industry cooperation puts both independent power producers and public utility companies at a disadvantage when dealing with Congress and foreign markets., Seven years ago, when I joined the National Independent Energy Producers (NIEP) as its first executive director, I was daunted by the task in front of me. I had a [...]

Public utilities companies will need to alter their marketing and management strategies to remain competitive after deregulation. Customers' desire for value-added products must be met by an industry that has long enjoyed a monopoly. Individual companies must bolster their information networks to monitor and respond to competitive changes within the industry. Additionally, utilities companies must reform their style of management to promote greater efficiency., LAST YEAR, FORTUNE MAGAZINE RAN AN ARTICLE CALLED 'DINOSAURS?,' DESCRIBING HOW TODAY'S CORPORATE POWERHOUSES CAN BE TOMORROW'S BUSINESS SCHOOL AUTOPSY. The article focused on conditions at IBM, GM, and Sears, [...]

Public utilities and conservationist groups have joined forces in opposition to an Ohio bill that would institute retail deregulation in the state's utility industry. Public utilities oppose the plan because it would topple their monopoly control over the industry. Conservationists oppose it because they fear price competition will stall investments in environment-friendly technology. State consumers have not come forward in support of the bill even though they stand to benefit the most from the deregulations., A retail wheeling bill, introduced in the Ohio legislature by Rep. Ron Amstutz on February 28, has met with powerful and effective opposition from utilities and from conservation and environmental [...]

Antitrust law is becoming increasingly important in the public utilities industry as deregulation continues. Antitrust law must be used to protect facilities, such as transmission wires, that are fundamental to all utility companies and ensure that they do not become the exclusive property of any one utility. It must also be used to ensure fair access to the market and reasonable pricing schemes. Prudent application of antitrust law in the public utilities market will foster better competition and serve the needs of the consumer., With the growth of a more competitive bulk-power supply market, the antitrust laws--both federal and state--become of greater significance. There is a need to protect equitable availability of 'essential facilities' [...]

Deregulation in the public utilities industry has created great uncertainty among investors. Deregulation will likely result in lower rates and consequently lowered profits. Furthermore, subsequent regulations are likely to affect the industry in ways investors cannot yet forecast. Increased efficiency in electric energy production might further drive down rates by creating energy surpluses. Prospects for investors are not good. Deregulation may result in temporary disruption or large-scale bankruptcy., That increasing competition will put pressure on utility earnings is axiomatic. It will reduce the market power of utilities, and that will cut earnings. The extent and duration of this [...]

The growing trend toward competition in the public utilities industry is demonstrating tangible savings to both the industry and the consumer. The costs of managed regulation are difficult to assess, but the industry's first steps toward deregulation already suggest that it represents far greater savings. Estimated savings for 80 sample utilities would be $31 billion. The call for deregulation is expected to grow as such figures become more widely known and proven., Assessing the costs of utility regulation has never been a particularly rewarding endeavor. The difficulty has stemmed from an inability to evaluate with confidence how the industry would behave in [...]