Utilities paying price for counting on demand growth that never came

Utilities are suffering from a combination of problems caused by a flattened demand, high prices, poor earnings, depressed stocks, and cost overruns. Federal policies to help include an endorsement of nuclear power, assistance for the Three Mile Island cleanup, tax incentives to attract capital, and promises of rate relief may not be specific enough. Utilities are looking toward economic deregulation and new business opportunities beyond power generation and delivery. Overcommitments to expansion are a major problem, but many projects are under construction and need extra money to complete. Whether customers should be charged for future capacity by including construction costs in the rate base will be decided on whether the customer is considered a mandatory investor. Proponents of deregulation view electricity as a product instead of an entitlement and see a market ready for new kinds of energy production and services. (DCK)