Public Utilities Reports

PUR Guide 2012 Fully Updated Version

Available NOW!
PUR Guide

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

S&P: Municipal Tactics as Effective as Mergers

Fortnightly Magazine - October 15 1995

Standard & Poor's (S&P) CreditWeek Municipal notes that municipal electric utilities are resisting the investor-owned utility (IOU) merger trend in favor of competing through internal cost controls and sharing of services. The main reason, according to S&P directors Marla Fox and William Cox, is that municipals are political entities governed by city councils or appointed boards, and mergers would result in less authority for those decisionmakers. Another factor is that many municipals provide revenue to support their governments' general fund; however, that practice is being scaled back due to increased competition. Municipals are cutting costs by reducing workforces, renegotiating contracts, and paying down high-cost debt. They have also formed alliances, and shared services in procurement and generating and operating functions. Such methods, the report concludes, "could be just as effective as the [IOU] mergers to date."

15

Articles found on this page are available to Internet subscribers only. For more information about obtaining a username and password, please call our Customer Service Department at 1-800-368-5001.