Sample Speeches

A U.S. Perspective On Global Restructuring Of Utilities
Presentation By William E. Davis
Chairman And Chief Executive Officer Niagara Mohawk Power Corp.

Before The Ieee Program,
"The Future Of The Electric Power Industry In Ontario"
Royal York Hotel
Toronto Ontario, Canada

November 29, 1995

Good morning. I'm happy to be here with you this morning. I've been asked to offer a U.S. perspective on the global restructuring of utilities. While I'm certain there is no one common U.S. perspective on this issue, my company has recently announced a comprehensive restructuring plan after several years of study of the U.S. and world electricity markets. So hopefully I'll be able to offer a few insights.

Our studies have highlighted for us -- and this is hardly a revelation -- the worldwide trends toward electric utility privatization and deregulation, which started in the United Kingdom , and have worked their way around the globe. Some nations are well along in the transition to competition, others, including most U.S. states and Canadian provinces, are in the active planning stage.

The key question at this point is not whether there is a trend toward deregulation, but whether it will persist. And on this point, the most valuable perspective I can offer is not my own, but that of the distinguished regulatory economist Alfred Kahn, whom you will have the pleasure of hearing later this morning.

Mr Kahn says -- and I apologize in advance if I'm stepping on his presentation -- that in order to judge the persistence of the deregulatory trend, we should look for its root causes. He finds them in the rediscovery all over the world of the "virtues of the free market.

He adds that it's no accident that many of the state-run enterprises being overturned during the late 1970s and early 1980s were established during the Great Depression..." when confidence in the market economy was at its nadir."

"While the present enthusiasm for market capitalism will doubtless be subject to ebbs and flows in the years ahead," he concludes, "it is difficult to envision an early return to centralized government command and control systems...."

The trend away from command and control in U.S. public policy had already caught up the telecommunications, trucking, air lines and financial services industries, to name just a few, when Mr. Kahn offered that opinion in 1990. At that time, the deregulatory trend in the electric power industry had barely begun. In the years since it has been in constant acceleration.

The passage of the federal Energy Policy Act of 1992 removed all doubt that open competition at the wholesale level would spread throughout the U.S. The Act gave the Federal Energy Regulatory Commission the power to order open access to utility transmission systems at the wholesale, but not the retail level.

That power was reserved to the states. And nineteen months ago, when the California Public Utility Commission released its plan to open the marketplace to competition, the focus of the debate shifted toward retail competition.