Utilities in trouble

An economist examines the plight of investor-owned electric utilities by posing and responding to four questions. He cites poor stock and bond performances and depressed rates as evidence that there is a financial crisis. He blames rate regulation and not competition from other energy sources for the depression utilities are experiencing. The consequences of US institutional constraints weaken the industry's ability to finance capital investment, but financial health might be restored by decontrolling generation and regulating only the distribution of electric power. The article draws upon remarks made at an Electric Power Research Institute seminar in August, 1981. (DCK)