Duquesne Light's Morgan K. O'Brien

It wouldn't seem that a shrinking utility serving a shrinking region would have much to say about the future of the nation's utility industry. But the deal struck early this month by Duquesne Light and Macquarie Infrastructure Partners could offer a model for the many smaller utility companies that find themselves trying to please investors as much as they please customers.

At its core, the proposed $1.59 billion buyout would privatize the Downtown-based electric utility, eliminating the pressures for financial performance that have come from being a stockholder-owned enterprise operating in a newly deregulated environment.

It was those pressures that got Duquesne Light into so much trouble at the decade's turn, as it ventured far afield from its roots -- selling its power generation businesses, acquiring water systems and investing in new energy technologies and gas -- to act like a growth company and be treated as such on Wall Street. It was strategy that failed miserably, forcing Morgan K. O'Brien to adopt a "back to basics strategy'' after taking the reins in 2001.

Duquesne Light, of course, was not alone among energy companies that spread their wings in the go-go '90s. The utility industry is littered with the detritus of growth strategies gone bad -- and back-to-basics movements in their wake.

The most obvious and dubious example is Enron Corp. Formed from the consolidation of two pipeline companies, it became the biggest buyer and seller of gas and electricity in the country and dabbled in other commodities, too, before collapsing under a mountain of scandal.

As he reined in Duquesne Light, Mr. O'Brien also reined in its growth prospects -- revenue has declined in five of the past six years. And it's not likely that will change in any significant way in coming years for a utility serving a region that keeps falling down the list of the largest metro areas.

So it was that, as a "very tiny player'' among electric utilities, Duquesne Light was in line to be a seller, not a buyer, in the industry's ongoing consolidation, Mr. O'Brien told the Post-Gazette this past week. But it was his choice of buyer that was unique.

In Macquarie Infrastructure Partners, the Downtown-based company settled on an offshoot of Australia's giant Macquarie Bank Ltd., which professes to be more interested in long-term, steady returns from high cash-flow businesses than on sexier, and risker, returns demanded by Wall Street and its ilk.

Toll roads, gas companies, airport and parking facilities are among the investments in its stable -- investments that promise to generate steady, long-term returns for the billions in pension funds that various Macquarie funds manage. That fits with what Duquesne Light can deliver. "We're not a business that generates short-term value," Mr. O'Brien said.

Even better, Mr. O'Brien found a buyer that he says doesn't really want to change anything, freeing him and his managers to do what they say they want to do -- make Duquesne Light a better, more reliable provider of electricity for the more than 500,000 households it serves in the region. It's in the midst of a $500 million to $600 million capital improvement project that it hopes will do that.

More broadly, Mr. O'Brien says that with the weight of Wall Street off his back, he also can focus on doing other things to improve the community, including assisting with economic development and helping improve the plight of the working poor. His company "only does well if the community you serve does well," he explained.

That may sound like good corporate-citizen speak, whispered into Mr. O'Brien's ear by his handlers minutes before meeting with the Post-Gazette's editorial board. And the proof of Macquarie's supposedly good intentions only will become clear with time. But actions speak louder than words, and the actions Pittsburgh native O'Brien has taken so far merit giving him the benefit of the doubt.