ABSTRACT
As one of those who helped to put the RPI-X system into place, what strikes me about the current debate is the unwillingness to see it as a major change in the modes of influencing utilities. Technically, RPI-X is an incentive system for motivating utility managements. Its essence is in the forward-looking targeting of prices for a period ahead sufficient to give inducements for companies to better their targets. Privatization’s essential contribution was the break from old forces shaping the motivations of incumbent managements. Exposure to capital markets and potential competition among managements for control plus the personal gains in prospect no doubt has tended, over time, to replace the incumbent management culture.
