Porter Analysis Electricity Industry Essay

1732 Words 7 Pages
Regulated Electricity Utility Industry
The electric utility industry generates, transmits and delivers electrical power to consumers, businesses and governments. Today there are three primary business structures in the regulated electrical utility industry—public companies owned by shareholders, municipally owned companies, and those owned and operated by the federal government. Shareholder owned companies are the largest group, providing half of all electricity in the United States.
Burning fossil fuels to power steam turbines produces over half of electricity consumed today.1 Other generation methods include harvesting the power of nuclear reactions to power turbines and, increasingly, renewable methods such as wind or water-powered
…show more content…
For nearly a century PUHCA provided the framework for control over the regulated power industry.2 By signing into law The Energy Policy Act of 2005, the President and Congress have set new priorities in national energy policy, effectively repealing PUCHA and changing the competitive landscape in this industry. The act provides incentives for modernization and investment in infrastructure; it encourages continued exploration into fuel diversity; and, finally, it lifts the strict controls previously in place governing the ownership and corporate structure of companies within the industry.3 Steadily increasing demand and complex regulations governing investment and growth have resulted in a power generation and transmission system nearing its limits, and the Energy Policy Act was adopted to reverse that trend. Specifically’ it “provides for enforceable mandatory reliability standards, incentives for transmission grid improvements and reform of transmission sitting rules. These improvements will attract new investment into the industry and ensure the reliability of our nation’s electricity grid to stop future blackouts.”4 The need for these steps was perhaps best illustrated in August, 2003 when New York City was hit by a blackout that cost the city an estimated $500 to $750 million in lost revenue.5 The Act also encourages a wide array of cleaner fuel alternatives by investing billions of federal dollars toward tax incentives and research and development

Related Documents