Potential Impact of the President's Economic Recovery Plan on the Electric-Utility Industry - with Commonwealth Edison Company Serving as a Case Study

摘要

The objective of this study is to determine whether the President's economic recovery program (ERP) will result in a set of economic conditions which: restores the industry to its former financial health, thus allowing utilities to make investment decisions which are both cost-effective to customers, and beneficial to existing and prospective investors, or leaves the electric utility industry in a financially constrained condition. Thus requiring additional remedies if necessary investments are to be made. These additional remedies might include a restructuring of the rate regulatory process, further reductions in inflation, or a relaxation of environmental, facility licensing and other regulatory proceedings which have significantly increased utility costs. The principal conclusion to be drawn from this study is that the President's economic recovery program (ERP) will not significantly improve the electric utility industry's financial health. Thus the construction of needed generating capacity will continue to be jeopardized. The primary cause for this result is that even under the improved economic conditions associated with the ERP, costs will increase, utilities will be forced to seek increases in their electricity rates, but regulatory commissions-based on historical experience-will not grant increases of sufficient size which both: allow utilities to fully recover cost increased. Result in a significant improvement in the key measures of utility financial health. (ERA citation 08:033864)