Privatized utilities there face bankruptcy because commercial power plants keep raising their rates, citing soaring oil prices. When you push companies too hard to focus on delivering lower prices and becoming super efficient, you leave very little room for error. No Asian country has gone as far as letting market forces dictate everything. The California crisis will hopefully make regulators here more watchful. The company will likely retain a nuclear-generation subsidiary that owns 14 plants because of concerns that a nuclear facility in private hands may put commercial considerations ahead of safety.
Analysts generally applaud the planned transformation.
It builds and operates power plants, which require enormous capital and a long gestation period before making big money. The steady but unspectacular profits come from the distribution and transmission operations. Shareholders sometimes discover that the recession-proof stream of earnings they are counting on is being diluted by interest payments on borrowings. The investment action will shift to the power producers, which could yield much bigger returns but also carry higher risks. They can leverage these to distribute other services.