Prudential Predicts Revenue Losses for All Utilities

Fortnightly Magazine - July 1 1996
This full article is only accessible by current license holders. Please login to view the full content.
Don't have a license yet? Click here to sign up for Public Utilities Fortnightly, and gain access to the entire Fortnightly article database online.

In a recent report, A Free Market for Power Would Mean Revenue Losses for All Utilities (em But Some Would Suffer More Than Others, Prudential Securities simulated a competitive electricity market (em assuming that all industrial and commercial customers would be able to choose their electric supplier by 1998 (em to find out how a completely free market for power would affect utility revenues, earnings, and dividends.

The competitive risk study statistically measured marginal costs, then created a simulated spot-market electricity price for each of the 11 geographical regions of the United States. The components of electric prices were unbundled to estimate the price each utility would charge for its power in a fully competitive market. Prudential found that potential spot prices would be surprisingly lower than the average tariffs utilities currently charge.

This full article is only accessible by current license holders. Please login to view the full content.
Don't have a license yet? Click here to sign up for Public Utilities Fortnightly, and gain access to the entire Fortnightly article database online.