Special Report

Fortnightly Magazine - September 1 1997
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Midwest panel fears service decline, sees small companies as speed bumps on road to competition.

"Mergers and restructuring" could have described the panel, but "Four Weddings and a Funeral" gave the session the cinematic spin it demanded.

Craig A. Glazer, Ohio Public Utilities Commission chair, moderated this packed breakout session of the Mid-America Regulatory Commissioners Conference and opened with the key question: "Isn't there a certain irony that at the same time we're going toward competition, we've got more and more consolidation than we've ever had before?"

It was a question at the root of many of the MARC sessions. Telecommunications industry reps talked about the troubles of transition. Power companies dissected the uncertainties ahead. Water utilities mulled over the possibilities of having an electric parent. Many observed that the industry overlap was growing less defined. Even Sprint and Time Warner have electric utility strategies, noted Steven E. Collier of CHG Strategy Group.

As panelists breezed in or took the podium, interestingly enough, they complained privately or publicly about the airline that flew them to Des Moines, Iowa for the June 16-17 conference. Few mentioned the lessons of airline deregulation as they later promoted energy consolidation and restructuring.

They'll Need To Be Big

One panelist said companies will have to be big because they will lose bulk when unregulated subsidiaries provide their wires and ancillary services. Said Edward J. Tirello Jr., senior utilities analyst at NatWest Securities Corp.: "We think the smallest of the new competitors will probably be ... somewhere between two and five million customers ... and the biggest will be 10 to 20 million customers."

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