Power Industry Competition, Reengineering, and Globalization 1994 Transmission and Distribution Conference plenary session on the future of the U.S. electric utility industry

ast year I vowed to never again discuss the future of the electric utility industry. What more could be said? I was wrong, and more can be said. People, moreover, now listen. You can tell that they listen when a regulator claims that all the discouraging talk about the industry's future is equivalent to shouting "fire" in a crowded theater. It isn't. It is equivalent, though, to proposing, before the performance, that a fire hazard exists. The theater owner can then put in fire prevention equipment (which costs money, and putting it in constitutes an admission that something is amiss, so his lawyer tells him not to do it) or cancel the performance (which really costs money and might lead to lawsuits) or go on with the show and pray for the best. What is your company doing? Before I begin, let me tell you where I come from. I am not an engineer (an important disclaimer at this gathering) nor a lawyer. I studied history and economics. I work in finance, which colors my view. I believe that determined people who see a way to make a buck will oversee legal obstacles and find competent engineers to execute their plans. You cannot repeal the laws of physics to change the utility business, but we're not talking about doing so. People who deprecatingly say that the new electric industry will move money not electrons are right. They got the message, but it did not register. Begin at the Beginning Let's start with origins. Thomas Edison envisioned an integrated industry, modeled after the manufactured gas industry. He had his hand in the manufacture of electrical equipment the generation and the distribution of electricit v. (Transmission came later.) He could have gone farther, as did the Bell System, and owned the equipment on the custom­ ers' premises. (Actually, some electric companies did own the light bulbs on customers' premises). Joseph Swan, of Newcastle-on-Tyn e,