Can the Marketplace Assure Customers’ Electricity Needs in 2005?

Authors

  • Leonard S. Hyman Senior Industry Advisor Salomon Smith Barney

DOI:

https://doi.org/10.13052/dgaej2156-3306.1632

Abstract

Can we count on the energy market? Well we can count on the
market if we have a market to count on. That is true, almost by defini-
tion. But that is not what you really want to know, which is:
Can we count on the currently constituted electricity supply in-
dustry to furnish us with ample, low cost and reliable power
whenever and wherever we want it?
And the answer to that question is no. Maybe we can frame the
question better. But, before beginning, let’s not get into the battle of the
projections, the NERC projections that show gaps in supply, the RDI
projections that show oversupply, the EIA projections that always end
up in the middle of the road. Those projections do not show the reac-
tions of enterprising people to both challenges and opportunities, espe-
cially when expressed in terms of price. Can they react by 2005?
They can if you let them.

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Author Biography

Leonard S. Hyman, Senior Industry Advisor Salomon Smith Barney

Leonard S. Hyman, CFA, is a senior industry advisor to Salomon
Smith Barney. Previously he was managing director of Fulcrum Interna-
tional Ltd., as well as an independent consultant specializing in the eco-
nomics and finances of energy and telecommunications utilities.
From 1978 to 1994, as head of the Utility Research Group and first
vice president at Merrill Lynch, he supervised and maintained equity
research on foreign and domestic energy and telecommunication utili-
ties. He was a member of privatization teams for offerings of British,
Spanish, Mexican, Argentine and Brazilian utilities and consultant for other restructuring studies. Prior to joining Merrill Lynch, he was a part-
ner at a New York Stock Exchange member firm and an officer at Chase
Manhattan Bank.
Author of America’s Electric Utilities: Past, Present and Future, author
of The New Telecommunications Industry: Evolution and Organization and
editor of The Privatization of Public Utilities , he has contributed to other
books and to professional journals.
For more than a decade, Mr. Hyman was cited by Institutional In-
vestor as one of the leading research analysts in his field. He is a Char-
tered Financial Analyst (CFA). He holds a BA from New York University,
where he was elected to Phi Beta Kappa, and an MA in economics from
Cornell University, where he majored in industrial organization and mi-
nored in Latin American studies.
Salomon Smith Barney, Inc., 388 Greenwich St., New York, NY 10013;
212-816-8508

References

Gordon Hester, “E-EPIC Analyzing Emissions Policies,” EPRI Jour-

nal, Summer 2000, p. 28.

Hester, op, cit ., p. 3 1.

In the old days, industrialists did not have to face that uncomfort-

able decision. They could cry about the damage done to the state’s

competitive position, the loss of production to someplace else or

the loss of wages during downtime. They could make individual

consumers pay more to assure that industrialists could obtain be-

low-market power, or they could require that the utility take a

lower profit. Now, industrialists have to bid against everyone else.

Even worse, though, they bid against buyers who demand the elec-

tricity first, without knowing the price, and then complain after-

wards when they paid more than the electricity was worth to them.

That is why industrialists should promote real time pricing for ev-

eryone—it would reduce overall demand at peaks, and lower

prices for all.

Electric Power Research Institute, Electricity Technology Roadmap:

Powering Progress, 1999 Summary and Synthesis (Palo Alto: EPRI,

July 1999), p. 4.

The same fight took place in the telephone industry. See Leonard

S. Hyman, Edward DiNapoli and Richard A. Toole, The New Tele-

communications Industry: Meeting the Competition (Vienna, VA:

Public Utilities Reports, 1997)

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Published

2001-06-13

How to Cite

Hyman, L. S. . (2001). Can the Marketplace Assure Customers’ Electricity Needs in 2005?. Distributed Generation &Amp; Alternative Energy Journal, 16(3), 15–22. https://doi.org/10.13052/dgaej2156-3306.1632

Issue

2001: Vol 16 Iss 3

Section

Articles