The Bottom Line: The "Virtual Utility" Must be a Business

Authors

  • Leonard S. Hyman CFA Senior Advisor Smith Barney

Abstract

The "virtual utility" will only succeed as a business, not as a philo-
sophical concept derived from the latest managerial consulting fad, not as
a feel-good delivery vehicle for green energy, and not as a trust-buster's
means of injecting competition into a formerly monopolistic market.
We have spent too much time acting as if the electricity market
changed because regulators and legislators thought it should change,
when the real cause was technology) The virtual utility will not work
just because regulators or legislators think it is a good idea . It has to meet
the needs of customers, as the customers define those needs.
As with all virtual businesses, customers will not care how the firm
puts together the product. The customer of the virtual utility will ask
three questions:
When I flick the switch will the lights go on?
Will I pay no more than before, and, preferably less than before?
Will I get something I want that I do not now get from my utility?
The marketing effort of the virtual utility must answer those ques-
tions. Make no mistake about it. This is a marketing game. All the elec-
trons sold or conserved look the same, no matter the vendor.

Downloads

Download data is not yet available.

Author Biography

Leonard S. Hyman, CFA Senior Advisor Smith Barney

Leonard S. Hyman, CFA, is a senior industry advisor to Smith Barney. Previously he was managing director of Fulcrum International Ltd., as well as an independent consultant specializing in the economics 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 utilities . 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 partner at a New York Stock Exchange member firm and an officer at Chase Manhattan Bank.

Mr. Hyman has written and spoken on utility finance and deregulation, presenting papers on three continents. He has testified before Congress, served on four advisory panels for the u.s. Congress Office of Technology Assessment, and on one for the National Science Foundation. He was a member of task forces 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 Research and Public Policy. Author of America's Electric Utilities: Past, Present and Future, coauthor of The New Telecommunications lndusirq: Evolution and Organization and editor of The Prioatization of Public Utilities, he has contributed to other books and to professional journals.

For more than a decade, Mr. Hyman was cited by in st itutional lnuestor as one of the leading research analysts in his field . He is a Chartered Financial Analyst (CFA). He holds a BA from New York University, where he was 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

2023-09-30

How to Cite

Hyman, L. S. . (2023). The Bottom Line: The "Virtual Utility" Must be a Business. Strategic Planning for Energy and the Environment, 17(1), 5–10. Retrieved from https://journals.riverpublishers.com/index.php/SPEE/article/view/20703

Issue

1997: Vol 17 Iss 1 1997-1998

Section

Articles