•   •   •   •

Download the Paper (101 K, PDF file) - February 1, 2000 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing.

ABSTRACT:
We discuss the lessons that can be gleaned from the experience with electricity restructuring to date. The gains from restructuring are most likely to occur through improvement in the efficiency and prudency of long-term investment, but these benefits will be very difficult to measure. Though restructuring could have near term benefits in the efficiency of production and consumption, concerns with the efficiency of decentralized dispatch and the exercise of market power make it at least as likely that restructuring will not benefit society in the short run. We argue that electricity is especially vulnerable to the exercise of market power, even by firms with relatively small market shares, so there will be continued need for regulatory oversight in these markets, at least until there is much more real-time demand responsiveness. Thus, restructuring in electricity markets is not now, and is unlikely to be, synonymous with deregulation.

SUGGESTED CITATION:
Severin Borenstein and James Bushnell, "Electricity Restructuring: Deregulation or Reregulation?" (February 1, 2000). Competition Policy Center. Paper CPC00-014.
http://repositories.cdlib.org/iber/cpc/CPC00-014