Utilities Lose Safe Status as Deregulation Spreads

By Linda Stern Reuters News Service | St Louis Post-Dispatch (MO), April 14, 1997 | Go to article overview

Utilities Lose Safe Status as Deregulation Spreads


Linda Stern Reuters News Service, St Louis Post-Dispatch (MO)


Gone are the days when an electric utility stock was a sure thing, certain to get you big dividends, some growth and a piece of a monopoly.

Now, with deregulation of utilities sweeping the country at the speed of an electric charge, many investors are in for a shock.

It's no longer safe to just buy these stocks for their big dividends, throw the certificates in a drawer and forget them. With increasing electric power deregulation, some of these companies will do well and others will turn against you. Well-managed companies in fast-growing areas could turn around and deliver growth as well as high dividends to their shareholders, while weaker utilities in slow-growing markets could cut their dividends and their earnings expectations. Adding insult to injury, many power companies subject to deregulation are charging businesses less and consumers more for the kilowatts they deliver. So investors in these highly competitive markets could find the value of their utility stocks going down even as their electric bills went up. To complicate matters, utilities are meeting deregulation in the best traditions of American business - by buying each other. "Merger activity and industry consolidation will likely be the most significant factors affecting the industry in the near term" according to utility watchers Steve Colton and Dong Zhang of American Century Investments. On the positive side, investors are looking at utility stocks for growth for the first time ever. But how do you do that? Here are a few points to consider if you already are a utility investor or expect to be. Don't panic and sell your stocks in a hurry or buy new ones. Though California, New Hampshire, Pennsylvania and Rhode Island already have moved to deregulate electric power, other states are moving more slowly. Experts believe it will take three to five years for deregulation to be felt nationwide. Take some time to think about why you own, or want to own utilities. Then you'll be in a better position to plan your utility investments. Look for companies that are making healthy profits on moderate power prices. What's moderate? Residential customers are paying an average of 8.8 cents per kilowatt hour while industrial customers are paying 5.4 cents. But those rates can go as low as 4.6 cents and 2.6 cents, or as high as 16.8 cents and 12. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Utilities Lose Safe Status as Deregulation Spreads
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.