The future is spelled CONSUMER.

• Author: Luecal, Scott
• Position: Characteristics of emerging paradigm in electric utilities industry

Participants at NRECA's 1992 Advanced Management Program developed a set of ideas as to a possible formulation to the paradigm shift currently underway in the electric utility industry. Steve Collier's article will provide you with an understanding of the shift's evolution and current status.

The previous article, "Restructuring in the Electric Utility Industry: Old and New Paradigms" by Steve Collier, gives you an understanding and insight into the paradigm shift which is now evolving in our industry. What will be its final form? Let's see if we can provide a composite of the future of our industry. We will do this through two vehicles:

1. An extraction of key ideas from Joel A. Barker's new book, Future Edge--Discovering the New Paradigms of Success, will provide you with an understanding of what a paradigm shift is and the implications of a shift.

2. An explanation of the insights and ideas of the Advanced Management Program participants' responses to questions in three categories: What is necessary for the success of our industry, our individual rural electric systems and ourselves as the leaders of our industry and our systems.

Joel Barker explains a paradigm as "a set of rules or regulations that establish or define boundaries that tell you how to behave inside the boundaries in order to be successful."(1) A paradigm shift, therefore, is "a change to a new set of rules."(1) As Steve Collier explains, the old electric utility paradigm was based upon a natural monopoly, cost-plus regulation and an obligation to provide service, operating effectively because of economics of scale and substantial growth. "A new paradigm seems to be competition for retail customers, resources, and return for investors."(2)

The "regulatory bargain" states that the utility regulatory commissions seek to balance the interests of the investor and ratepayer in order to promote the public interest. Calvin Manshio, a former Illinois Commerce Commission member, states in his article, "The Realpolitik of Regulation," that "technology, law and regulation have all contributed toward creating a new paradigm based on market economics. Timely responses to market conditions and customer attitudes is what makes commercial success. Unfortunately, the regulatory bargain does not reward or even provide timely response."(3)

This article appeared in the May 1, 1992, issue of Public Utilities Fortnightly, and makes for informative reading.

It is difficult to envision this shift, and therefore more difficult to competitively position your rural electric. Why is it difficult to see the shift? Barker explains that the answer to this question is a concept called the "paradigm effect." "Paradigms act as...