Utilities have recourse to regulation and markets in order to correct their balance sheets. But deregulated markets have REPs, who are exposed to the market's vagaries. How will deregulated markets handle the Covid-19 crisis? I wrote a short piece about it on my personal site. I used Texas as an example because it is one of the biggest and most well-developed deregulated electricity markets in the country. The long and short of it is that the top REPs are backed by large and well-established names, including a subsidiary of oil giant Shell, and can absorb losses on their balance sheet. POLRs can be pressed into action, in case of a default. But customers may face higher bills as a result of the arrangement.
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