The Fading Utility

Abstract

Do you remember “utilities?” In the last century, they generated the
power and provided the transmission, distribution and commodity sales
that lit up our world.
When you flipped the switch, your only choice was to pay THE
UTILITY, which controlled your power supply. They were accountable
only to state regulators and the Federal Energy Regulatory Commission.
You were the “rate payer” and they were not accountable to you. If you
didn’t like the service, you choices did not include “taking from a neigh-
boring utility”—even when the neighbor might deliver power for one-
third of your current charges.
Then, late in the 20th Century, Congress passed the Energy Policy
Act and the restructuring of the electrical energy industry began.
Now, the deregulation pot is coming to full boil. But amid all the
turmoil regarding stranded investments, predicted rate changes, inde-
pendent system operators, company mergers, etc., etc., an amazing phe-
nomena has been virtually ignored. The utility is fading into oblivion.
The large vertically integrated “power houses” are destined to be-
come a thing of the past. The monopoly power utilities have enjoyed will
be dissipated. But this power will not go quietly or painlessly. The death
throes will not be a pretty sight.
Many utilities have made cosmetic changes. “Rate payers” have
became customers, “cost” has turned into price, parts of “regulation” have
become popularly termed market forces.