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RCED-84-22 1 (1984-06-11)

handle is hein.gao/gaobaberl0001 and id is 1 raw text is: 
kELEASED


BY  II  U   H S   (--NL[,AL


ACCO UTING


OFFICE


Report To The Chairman, Subcommittee On

Energy Conservation And Power

House Committee On Energy And Commerce


Analysis Of The Financial Health Of The

Electric Utility Industry


This report analyzes the past, present, and
future financial health of the investor-
owned electric utility industry

The 1970's was a financially difficult period
for the industry, with 1 974 being a particu-
larly poor year Since 1973, unusually high
debt and large construction programs during
periods of inflation and high interest rates
had a negative influence on the industry's
financial health Although individual regula-
tory factors were not found to have a signifi-
cant relationship to the industry's overall
financial health, regulation's influence is
reflected in the industry's stable profit pic-
ture After 1981 , such indicatorsof financial
health as the market -to-book-value ratio of
common stock and the rate of return
improved

Industry is acting to reduce debt and con-
struction  If inflation and interest rates stay
below previous levels, the industry's finan-
cial prospects should be more favorable
during the 1980's as compared with the
1970's




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124702


GAO/RCED-84-22
JUNE 11, 1984


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