Goodbye to All That?

 

 

An analyst looks at prospects for emerging power technologies in light of the recent turmoil over deregulation.

In mid-1997, electricity deregulation seemed on the verge of sweeping the country. Based on our prior experience with deregulation, in natural gas and airlines principally, I became convinced that deregulation would lead to profound changes in the power industry. These changes would lead, in this view, to significant opportunities for new entrants and for companies developing new technologies for the power industry. I based this conclusion on my experience in the early 1980s as a consultant to the power industry and on a close reading of the literature on deregulation, both suggesting that decades of regulation had a stultifying effect on industry generally and, at least in my experience, on the power industry specifically. Deregulation would change all that, bringing new entrepreneurial management to the industry, attracting risk capital, and sowing the seeds for investment in technologies that would change the way power was delivered, priced, and used.