"Utility mentality" has become synonymous with a clinging dependence upon regulation to protect an organization from risk and competition. It also denotes momentum planning and management (em that is, using past performance to project future performance. This way of thinking made sense when companies could count on regulators to shield them from market forces and competition. The current regulatory trend, however, encourages competition as a means of reducing costs to energy utility customers, as it did in other industries (em notably, oil and gas production, gas transmission, airlines, and long-distance telephone.
Reports of the death of utility mentality are greatly exaggerated. A number of utility executives have merely paid lip service to the competitive transformation of their companies. They await a return to a more regulated, less competitive atmosphere. They ignore the worldwide trend to reduce government control and increase competition. They fail to recognize that their industrial rates compete globally, not just regionally. They forget that capitalism founded the world's standard of living (and the wealth that accompanies it). Government control and ownership, on the other hand, have retarded progress. The logical progression is toward more open markets, and the pendulum is swinging. Companies must either move forward or die.
As in the case of any entrenched institution, a utility's fate may take several forms:
s Old Age (em The company suffers a slow, lingering death, often exhibiting dementia.
s Homicide (em Vitality fails and the company's final demise is brought on by disgruntled shareholders or an acquiring company.