03/11/2015 - by Eric L. Prentis, University of Saint Thomas, Houston
Electricity prices in restructured electric utility states have been empirically tested in restructured states, pre- and post-restructuring, relative to U.S. electricity prices. Are electricity consumers better or worse off as a result of electric utility restructuring?
The vertically integrated, government-regulated natural monopoly electric utility model worked well in the U.S. for nearly 100 years; however, some governors and state legislatures wish to reduce their states’ electricity prices and have been advised that electricity prices would fall naturally if free market competitive marketplaces were established.
Consequently, beginning in the late 1990s, some states restructured their vertically integrated, government-regulated natural monopoly electric utilities by instituting free market competition in the electricity generation and retail sales’ sectors while maintaining the middle-two sectors of transmission and distribution as a government-regulated natural monopoly.
Read more...
The vertically integrated, government-regulated natural monopoly electric utility model worked well in the U.S. for nearly 100 years; however, some governors and state legislatures wish to reduce their states’ electricity prices and have been advised that electricity prices would fall naturally if free market competitive marketplaces were established.
Consequently, beginning in the late 1990s, some states restructured their vertically integrated, government-regulated natural monopoly electric utilities by instituting free market competition in the electricity generation and retail sales’ sectors while maintaining the middle-two sectors of transmission and distribution as a government-regulated natural monopoly.
Read more...
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