#Utilities experience competition, don’t like it, run crying to #regulators RSS Feed

Utilities experience competition, don’t like it, run crying to regulators

….A while back, holding companies were rushing to buy more generation utilities, since there were big profits to be made from big power plants on wholesale power markets. But a funny thing happened in those markets: They got competitive. In fact, natural gas and wind (the mammals) started out-competing big old baseload plants (the dinosaurs). Now, the profits of those coal- and nuke-heavy generators are in serious doubt; those big old power plants are looking more and more like potentially stranded assets.

So what are holding companies doing? They’re rushing back in the other direction, attempting to buy up more regulated distribution utilities, where profits are guaranteed by regulators and therefore much more stable and predictable. If holding companies encounter sympathetic regulators — and money has a way of generating sympathy — they can even raise rates on those retail customers in order to pay for the crappy old baseload plants their generation utilities own. Not great for customers, but good for the bottom line.

Read full article at Grist