America's vertically integrated electric utilities will soon face the prospect of direct competition. Initially, this will occur at the "upstream" side of their business to provide the supply of electric power to the utility's system. Later, the "downstream", retail side of the business will open up, especially for large industrial and commercial customers. After many years as a monopoly with essentially cost-plus pricing, competition will pose a significant threat to these high cost utilities. Fortunately, unlike previously deregulated industries, electric utility have a number of years in which to prepare themselves for competition, and the experiences of their forerunners to guide their preparation. This paper first present an analysis of the outlook of a typical, but hypothetical, eclectic utility in the face of such competition, and then examines a range of options for preparing for a competitive environment. These analysis show that the difference in present value to shareholders between successful and unsuccessful strategies can be as much as $150 million (20%0 over a 10-year period, and $ 1 billion (40%) over a 25 -year period.

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Date created

• 1994

Type

• Document

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• Processing documentation available at: https://wiki.albany.edu/display/SCA/Processing+Ingested+Digital+Files

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• Creative Commons BY-NC-ND Attribution-NonCommercial-NoDerivs 4.0 International

  
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fe35db792b573af835d96e6eba4759cd

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Collection

System Dynamic Society Records

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• This collection is part of the University Archives