BEECHER - NAWC

Water ComparedStrategic IssuesrINaturalmonopoliesInstitutional~ monopoli~e•s• .. ---•Network~ companie,.Js• .. ••••lUnbundledserviceproviders~ CompetitorsFigure 5-l. Evolution of Public UtilitiesStrategic IssuesRestructuring raises a number of issues for water utility managers to contemplate (Table 5-l ).The changes in the industry will put water managers under a certain degree of pressure.Water utilities may be seeking regulatory approval for capital projects, and rate increases topay for them, at a time when other regulated industries are holding down costs and rates.Gaining approval for new facilities might be particularly difficult. While the trend inelectricity is to use smaller, cost-effective increments of capacity, most water utilities fmdsubstantial economies of scale in building larger facilities.A number of other interesting issues arise as well: how to innovate within the confines ofwater technologies, how to flex the purchasing power of high-energy use water utilities in.competitive electricity markets, and how to respond to convergence overtures. These andmany other strategic issues are sure to keep water managers busy.NAWC 98 September 1998