RISK FACTORS IN PUBLIC UTILITY SECURITIES.

This article examines risk factors related to electric utility securities in the U.S. The author notes that these securities do not face the normal risks that are associated with most business enterprises in the U.S. They do not face rapid technological change, the output is highly essential and demand is widely diversified. Inventory and bad debt risk are both negligible. The risks they do face come in the form of government regulation and the threat of government subsidized competition. The author specifically focuses on the impact that government rate setting has on electric utilities.