The Energy Service and Delivery Industry

Paper Summary:

This paper explains that the very nature of electricity is that it cannot be stored, which does not complement the economic laws of supply and demand; therefore, without government intervention, it is unsure if the industry would adapt to a free market system by providing enough energy to meet affordability public demand but rather divert to monopolistic behavior. The author points out that the federal government intervenes through the Security and Exchange Commission (SEC) and the Federal Energy Regulatory Commission (FERC); the Department of Energy's Federal Energy Management Program (FEMP) assists federal agencies and energy managers by providing services in the areas of financing, technical assistance, outreach and policy and local governments regulate the taking of property through eminent domain, pollution control and various local ordinances.This paper relates that, although government continues in the direction of deregulating the industry, the regulatory reporting requirements have created numerous jobs in the areas of accounting, reporting, and compliance; computer systems, applications, and products in data processing (SAP) help to maximize resources and assist greatly in data management and government reporting compliance.

Table of Contents
Introduction
Brief History of Electricity and the Utilities Industry
Service and Delivery Territorial Boundaries
Welcome to Company "A"
Government Intervention in the Energy Services and Delivery Industry
Brief History
Federal Government Intervention
The Federal Energy Regulatory Commission (FERC)
The Securities and Exchange Commission (SEC)
State and Local Government Intervention
Key Government Legislation Affecting the Industry
Public Utility Holding Company Act of 1935
Sarbanes-Oxley Act
Generally Accepted Accounting Principles (GAAP) and Government Reporting Requirements
Establishing and Maintaining Effective Reporting Systems
Systems, Applications, Products in Data Processing (SAP)
Communicating with SEC Officials
Conclusion

From the Paper:

"As the demand for energy grew to mass proportion, it was necessary for governments to regulate the industry to prevent harmful monopolistic practices, allowing for public utility companies to service restricted geographic territories to best serve their customers. Many utility companies today generate a minimal amount of electricity and depend on independent system operators (ISO) who act as independent agencies to manage the flow of electricity along the long-distance, high-voltage power lines that make up the bulk of area's transmissions systems. These ISOs safeguard the reliable delivery of electricity.
Federal, state and regional governments collaborate in controlling electricity prices and the supply of electricity because a price or demand increase in one regional area affects electricity costs and supply of nearby regional areas. One region's energy crisis can have a spill over effect into other states and may spread across the country. This became apparent in California when there was not enough supply to meet the demand during California's deregulation of public utilities as California turned to neighboring regional areas to purchase additional power."

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