Electricity prices in the U.S. (in real terms) have held steady for two decades. A remarkable record achieved because of: cost cutting during the initial days of industry deregulation, the abundance of natural gas that changed the fuel picture for electric generators and the declining cost of capital spurred in part by lower interest rates. In many industries, underperforming managements often look to fob off poor financial performance by claiming that their business has been uniquely victimized by a “perfect storm”. But at least for the U.S.’s investor-owned electric utility industry, weather conditions have been perfect. However, these conditions are changing. That’s the impression we received from a number of financial and economic forecasters at a regulatory conference last week. Like all such so-called experts (ourselves included) they spoke in code — the Averch-Johnson hypothesis, electric rate trackers and the crowd pleaser, appropriate equity risk premiums. But almost uniformly […]