An economic slowdown might buy time for regulatory change.
Michael T. Burr is Fortnightly’s editor-in-chief. Email him at burr@pur.com.
Last month’s “Frontlines” column invoked the dreaded “R” word: “recession.” (See “Sub-Primed and Ready.”) In what turned out to be Executive Editor Richard Stavros’s final column in this space (Richard left the Fortnightly in September to join Dominion Resources in Richmond, Va.), he suggested the industry’s fortunes might actually benefit from an economic downturn, as Wall Street money flees toward defensive investments.
In this month’s cover story, “Pricing Regulatory Risk,” our panel of finance gurus agreed: Utility securities are looking good during the current flight to quality.
Of course, a recession would be nothing to celebrate. It would make life more difficult for consumers—and therefore for utilities and regulators. Ironically, though, Richard’s prediction could prove correct in more ways than one.