25 in 2025 and Beyond
In 1987, there were approximately 175 investor-owned utilities. Little or no consolidation had occurred since the Public Utility Holding Company Act of 1935 broke up Samuel Insull’s empire and effectively granted federal protection to utility companies against mergers. In the wake of the now infamous hostile takeovers that defined the 1980s, however, I saw the tide of consolidation coming to utilities. I predicted that there would be 50 utilities in 5 years, giving rise to my memorable research report titled, “50 in 5”. Regulation, deregulation, re-regulation, market turmoil and politics conspired against the original five year horizon, but today there are about 50 companies left. The biggest questions now facing the industry are how many companies will there be when the dust finally settles and what characteristics will define the survivors. My revised thesis is that there will ultimately be 10 to 15 integrated electricity companies that will need to evolve constantly incorporating technology with the traditional generation and delivery businesses.