The ties that bind

Codes of conduct and affiliate rules are meant to prevent abuses of market power, which, to many eyes, utilities have in buckets. Typically, state regulators, consumer advocates and, not surprisingly, competitors consistently argue that the incentives for regulated utility companies to favor their u...

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Bibliographic Details
Published in:Electric Perspectives 2001-03, Vol.26 (2), p.34
Main Authors: Morey, Mathew J, Valliere, Julia M
Format: Article
Language:English
Subjects:
Affiliates
Agreements
Brand loyalty
Business-government relations
Competition
Consumerism
Cost recovery
Cost shifting
Customer services
Electric utilities
Flexibility
Legislation
Market shares
State regulation
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Summary:Codes of conduct and affiliate rules are meant to prevent abuses of market power, which, to many eyes, utilities have in buckets. Typically, state regulators, consumer advocates and, not surprisingly, competitors consistently argue that the incentives for regulated utility companies to favor their unregulated retail affiliates over their competitors and shift affiliate costs to regulated markets are irresistible - with such undue market power, the utility could raise prices or withhold service without competitive consequences. So, regulators may conclude that they must counter market power and unfair economic advantages by adopting codes of conduct, dictating the relationship of the utility and its regulated entities to unregulated affiliate ones. But these codes, many utilities argue, sacrifice the company's business flexibility and economic efficiency.
ISSN:0364-474X
1930-3998