[robatsu]

Years ago, I worked briefly for The Southern Company, which is the largest publicly held electric utility in the U.S (Georgia Power, Alabama Power, and a bunch of other ones).

While there was certainly a lot of expertise in electric generation and transmission there, it rapidly became apparent to me that their true core competency was maintaining and exploiting their legal monopoly.

It wasn't a pretty sight.

[meric]

Sometimes governments resort to measures like legal monopolies to ensure infrastructure gets built.

Imagine a cash-strapped government 50 years ago in an undeveloped country wanting to build electricity infrastructure. The country's economic growth is stagnating because of a lack of infrastructure and there are few foreign investments because the country's economic growth is stagnating. If a foreign company DID choose to invest in electricity, and the investment was profitable, other foreign companies will jump in to compete; but if the investment was unprofitable, the company would just have lost a large chunk of cash. Therefore it was always more profitable to simply wait for another company to make the investment, and then see if electricity will be a profitable business in the country before making investment itself.

These catch-22's mean the government has little choice but to allow the first foreign company a local monopoly, at least for a limited time.

I'm just theorising all this out of thin air, though.

[robatsu]

In the U.S., this legal electric company monopolies were more or less granted w/the proviso of providing universal access, sort of the same goal.

The past 20 years, the electric companies are trying to wiggling out from under this, turns out they really don't want to sell electricity to residential users, in a lot of cases their big customers are subsidizing residential users. That is why, despite the hype to the contrary, residential electric rates usually go up under deregulation.

The typical electric company strategy the past 20 years is to try "surrender" their monopoly in unprofitable areas w/a lot of happy talk about competition/choice/consumer benefits and attempt to keep their monopoly in the profitable areas (wholesale transmission, generation/cogeneration for large consumers).