Electric Utility Privatization What We Can Learn from the British Experience

Authors

  • Leonard S. Hyman S eni or Industry Ad visor Smith Barn ey

DOI:

https://doi.org/10.13052/dgaej2156-3306.1233

Abstract

Privatization takes many forms . The act of privatization, how-
ever , alway s involves "se lling st ate -owned assets to th e private sector,
or ... allowing private en terpr ise to p erform functions pr eviously
h andled by the st ate ."* That definition, of course, includes outsourcing
of functions, or partn ering arra nge me nt s betw een th e gove rn me nt-
owne d ent ity and a priv at e firm.
Out sourcing is just a new word for contra cting out . Any well-
m ana ged busine ss will en gag e an oth er firm to perform for it functions
that it cannot p erform well on its own . That is ju st good business.
Selling th e enti re gove rn me nt -owne d bu sin ess t o th e priv at e se ctor is
th e most dramatic form of pri vatization. Gov ernm ent s wh ose busin ess
v entur es ar e disa st er s and govern me n ts in a d esp erat e hurr y to r ais e
money do not think about out sourcing. Th ey go all th e way .
Th e m ost famous pr iv atiz ation effort, that of th e Thatch er gov-
ern me nt, put th e conc ept on th e fr ont pag es. It embra ced priv atization
with zeal. It pu sh ed out th e priv atization s with th e enormous gu st o
a nd ferv or of th e tru e believer. Th e gove rn me nt r ak ed in billions of
p ounds . Millions of new inv estors bought sh ar es in dozen s of compa-
nies. Th ose investors clean ed up, in most cas es .
Is eve rybody happy ? Unfortunately, they are not. Tru e, the
Thatcher governm ent showed th at the governm ent could sell th e
dull est bu sinesses . The newly energized managements d emonstrated
how to r evitaliz e s e emin gly m oribund ent erpr is e s . But the
privatizati ons left a legacy of probl ems . We can le arn from th em .

Downloads

Download data is not yet available.

Author Biography

Leonard S. Hyman, S eni or Industry Ad visor Smith Barn ey

Leonard S. Hyman, CFA, is a senior ind us try ad visor to Smi th
Barn ey. Previou sly he was managing director of Fulcrum Int ern ati on al
Ltd ., as well as an ind ep end ent consultant specia lizing in the econo m ics
and financ es of ene rgy and telecommunications ut ilities.
From 1978 to 1994, as head of the Ut ility Resear ch Gro u p and firs t
vice preside nt at Merrill Lynch, he supe rvised and ma intained equi ty
research on foreig n and domestic ene rgy and telec ommun icat ion utili-
ties. He was a memb er of pri vatization team s for offerings of British,
Spa nis h, Mexican , Arge n tine and Braz ilian ut ilities and cons ultan t for
othe r re stru cturing stud ies. Prior to joinin g Merrill Lyn ch, he was a p art -
ner at a Ne w York Stock Exchange member firm and an officer at C hase
M anh attan Ban k.
Mr. Hym an ha s wr itten and sp oken on ut ility finan ce and der e gu-lation. presenting papers on three continents. He has testified before
Congress, served on four advisory panels for the Ll.S. Congress Office of
Technology Assessment, and on one for the National Science Founda-
tion. He was a member of task force s on electric utility efficiency for
Pennsylvania and on fusion and other energy sources for NASA. He is
on advisory boards for the Electric Power Research Institute and EXNET,
and on the editorial board of Forum for Applied Resea rch and Public Policy.
Author of America's Electric Utilities: Past, Present and Future, co-
author of The New Telecommunication s lndustrv: Eoolution and Organization
and editor of The Prioaiization of Public Utilities, he has contributed to
other books and to professional journals.
For more than a decade, Mr. Hyman was cited by lnstitutional lnues-
tor as one of the leading research analyst s in his field. He is a Chartered
Financial Analyst (CFA). He holds a BA from New York Univer sity,
where he wa s elected to Phi Beta Kappa, and a MA in economics from
Cornell University , where he majored in Industrial Organization and
minored in Latin American Studies. He speaks Spanish and Portuguese.

Downloads

Published

2022-04-04

How to Cite

Hyman, L. S. . (2022). Electric Utility Privatization What We Can Learn from the British Experience. Distributed Generation &Amp; Alternative Energy Journal, 12(3), 61–70. https://doi.org/10.13052/dgaej2156-3306.1233

Issue

1997: Vol 12 Iss 3

Section

Articles