Some shareholders do find bottom-line value
in a "marriage of convenience."
With six merger and acquisition (M&A) deals announced between May 1995 and January 1996, and three more so far this year, the long-predicted consolidation of the electric utility industry is taking hold. At least 23 utilities, with business-combination transactions pending, are part of the frenetic domestic M&A activity that has swept the industry.
Over the past two and a half years, 10 large mergers have been announced, involving 21 investor-owned electric and gas utilities. Only the MidAmerican Energy merger has been completed, but the estimated market value of the pending mergers is an astounding $40.5 billion. Clearly, this recent wave of merger and acquisition (M&A) activity signals that electric utilities are positioning themselves for future competitive energy markets.
Results from Resource Data International's (RDI's) recent study, U.S.
When the Federal Communications Commission (FCC) instituted the subscriber line charge (SLC), telephone household penetration rates actually increased, even though local rates rose when the SLC was rolled in.
Management expert Peter F. Drucker has observed that our society has entered a "post-capitalist" stage in which economic activity is organized around information: "The basic economic resource ... is no longer 'capital' nor 'natural resources'...
Deregulate in haste; repent at leisure. That's what they say about love, marriage, and ratemaking. Yet, in the utility business the regrets are pouring in (em sometimes from the same people who sent out the invitations.
For example, at the end of November, a week before I put fingers to keyboard, the FERC was shocked to discover that the proposed Altus merger between The Washington Water Power Co. and Sierra Pacific Power Co.
The challenges facing the information technology (IT) industry into the next century are significant. Yet so are the opportunities.
For a good half a century, electric regulation has meant law, accounting, and economics. But no more. Now it's all about computers, telecommunications, and file-transfer protocols. Forget about CWIP, AFUDC, double leverage, and interest synchronization. They are all irrelevant.
The debate over the merits of pool-based markets as opposed to reliance on bilateral transactions and the invisible hand of competition began without much care taken to define the details of the bilateral alternative. On closer examination, however, we find the two approaches have much in common, being more like different pews than different churches. A further debate that emphasizes only the few differences would not inform so much as distract from solving the common problems.