Utility Infrastructures & Economic Restructuring

In the United States, most infrastructure services have long been under private ownership, but operated as monopolies under close regulation with regard to rates and services. The opening of these infrastructure services to market competition is most familiarly typified by the breakup of the Bell System monopoly in the mid-1980s. Long-distance telephone service was separated from the seven regional "Baby Bells" that provided local service, and the long-distance market was thrown open to new competitors such as MCI and Sprint. The result, as is well-known, has been not only lower long-distance rates, but also an enormous expansion of the scope and variety of telephone services, including call-waiting and call-forwarding, voice mail, and an great proliferation of cellular ph

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cussion below will concentrate on issues related to electical power generation. The primary problem of restructuring lies in dealing with consequences of the historical structure of the industry as vertically-integrated, regulated regional monopolies. If the industry were simply deregulated, it is by no means clear that managements accustomed to (and structured into) thinking and doing things in the old way would not simply take the opportunity to raise their rates, rather than offering competitive options that would appear to them in the short run as a threat. In the words of one consumer advocate, "Utilities want no real effective ability for small customers to exercise power in the marketplace" (Schuler, "Retail Aggregation," 29). Breaking up the integrated monopolies must thus be a primary element of restructuring, as breaking up "Ma Bell" was a primary element of competitive restructuring in telecommunications. De-integration, however, introduces a new host of problems, many dealing with public equity. In the past few decades, the greatest cost uncertainties in electric utilities related to power generation. For fossil-fuel plants, shifts in world oil prices could dramatically effect generation costs. Environmenta
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Approximate Word count = 3730
Approximate Pages = 15 (250 words per page)

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