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Electric Utility Deregulation: Analyzing the Prospects for Competitive Generation

Electric Utility Deregulation: Analyzing the Prospects for Competitive Generation AND OVERVIEW Efforts to reduce the scope of government economic regulation have had a major impact on the transportation, telecommunications, banking, and energy-related sectors of our economy over the past decade. More recently, the deregulation debate has been extended to electric power. As the electric utilities are even more central to the basic functioning of our economy than are some of the other recently deregulated industries, the stakes in this phase of the debate are particularly high. There are two basic reasons for considering the deregulation of electric power. First, the regulatory process that is applied to the electric utilities has not worked well over the past decade. In its present form, this regulatory framework threatens to contribute to significant economic inefficiencies in the industry. Second, deregulation is worth considering because it appears that recent changes in the underlying economic structure of the industry may have made competition more plausible than it was previously. Given these factors, a serious evaluation of the deregulation option is called for. A review of this policy option, undertaken below, leads to several conclusions. First, there are large uncertainties related to the feasibility of effective competition in present US power systems. Therefore, caution http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Annual Review of Environment and Resources Annual Reviews

Electric Utility Deregulation: Analyzing the Prospects for Competitive Generation

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Publisher
Annual Reviews
Copyright
Copyright 1984 Annual Reviews. All rights reserved
Subject
Review Articles
ISSN
1543-5938
DOI
10.1146/annurev.eg.09.110184.001305
Publisher site
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Abstract

AND OVERVIEW Efforts to reduce the scope of government economic regulation have had a major impact on the transportation, telecommunications, banking, and energy-related sectors of our economy over the past decade. More recently, the deregulation debate has been extended to electric power. As the electric utilities are even more central to the basic functioning of our economy than are some of the other recently deregulated industries, the stakes in this phase of the debate are particularly high. There are two basic reasons for considering the deregulation of electric power. First, the regulatory process that is applied to the electric utilities has not worked well over the past decade. In its present form, this regulatory framework threatens to contribute to significant economic inefficiencies in the industry. Second, deregulation is worth considering because it appears that recent changes in the underlying economic structure of the industry may have made competition more plausible than it was previously. Given these factors, a serious evaluation of the deregulation option is called for. A review of this policy option, undertaken below, leads to several conclusions. First, there are large uncertainties related to the feasibility of effective competition in present US power systems. Therefore, caution

Journal

Annual Review of Environment and Resources – Annual Reviews

Published: Nov 1, 1984

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