The new electric industry: what's at stake?

Market forces unleashed by deregulation are starting to transform the US electric utility industry. Mergers and massive consolidation will take place. New competitors will emerge to redefine the economics and competitive dynamics of the business. Some traditional players will make and shape the transition; others will dwindle, vanish or be subsumed. A once vertically integrated industry is about to fragment into 3 separate but linked businesses: generation, wires, and power services. Each will have its own players and its own distinctive, competitive dynamics. Tremendous value is at stake - equivalent to some 15% of today's industry revenues, or over 100% of the after-tax profits of all utilities combined - but there are also compensating opportunities to create value via restructuring and growth into new businesses.