Why Privately Held English Water Utilities Are Struggling (and Nationalization Isn’t the Answer) with Branko Terzic

Water Values Podcast

Recently, there has been talk in England about nationalizing England’s private water utilities. Former Wisconsin PSC Commissioner and FERC Commissioner, Branko Terzic, makes the case that England’s water utilities are not struggling because they are private, but rather because of a regulatory failure. Plus, Branko delves into how and why the U.S. system of utility regulation developed and much more.

In this session, you’ll learn about:

• Branko’s background as a utility engineer, appraiser, consultant, regulator and executive
• How and why England privatized its water utilities
• Economist Stephen C. Littlechild’s role in English water privatization
• Why England’s water rates skyrocketed after privatization but electric, gas and telephone utilities all fell
• Why the United States has a predominantly publicly owned system of water utilities (in contrast to predominantly privately owned electric, gas and telephone utilities)
• Why English regulation of water utilities has struggled
• Why high leveraging and capital structure of English water utilities created problems
• How poor regulation created capital structure problems and low water quality problems
• Typical capital structure of U.S. utilities
• Why most U.S. utilities capital structure typically has 40-50% equity despite debt being the cheaper capital
• Why interest rates for debt and equity capital increase as debt’s share of the capital structure increases
• What ringfencing is
• Branko’s thoughts on fixing the English regulatory scheme
• An overview of how water concessions work
• A brief history of Enron’s foray into private water
• Why market fragmentation is holding U.S. water systems back

Resources and links mentioned in or relevant to this session include:

• Branko’s LinkedIn profile
• Branko’s website

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