Reducing leakage to improve the bottom line.
Victor Milligan is chief strategy and marketing officer at software company Martin Dawes Analytics. Email him at firstname.lastname@example.org.
Utility companies continue to face considerable margin pressures that stem from a number of challenges. An overall weakness in the commercial market, a flat and fragile residential market, modernization costs with limited availability of capital, and a higher level of volatility in energy costs all continue to affect profitability. Although the impact of these factors might be magnified by the recession, they are likely to persist throughout a recovery. Also, rate changes that might lessen these impacts are available in some cases, but regulators’ biases to limit further economic pressure on ratepayers is reducing the overall opportunity and size of any rate relief.