This is Part 1 of a 2 part blog post on utility financial risk. Part 1 focuses on utility revenue risk and Part 2 focuses on utility debt risk.
On April 29, 2014, the Texas-based utility Energy Future Holdings Corp. filed for Chapter 11 bankruptcy, ending the largest leveraged buyout on record. Utility bankruptcies in general are rare, but even outside of the utility realm, a bankruptcy of more than $40 billion in an asset-based industry is unheard of. So naturally many of us are left asking questions – what went wrong and are other utilities at risk of going bankrupt? Continue reading