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Implementing Electricity Restructuring: Policies, Potholes, and Prospects

Author

Listed:
  • Palmer, Karen

    (Resources for the Future)

  • Brennan, Timothy

    (Resources for the Future)

  • Martinez, Salvador
Abstract
Electricity is one of the last U.S. industries in which competition is replacing regulation. We briefly review the technology for producing and delivering power, the history of electricity policy, and recent state and international experience. We then outline the major questions facing policymakers as they decide whether, when, and how to implement restructuring. We conclude with some thoughts on the California electricity crisis and other political controversies. Although the California experience has come to define what it means for electricity markets to fail, most of the problems it raised are among those we know how to solve or prevent. The still unresolved make-or-break issue remains whether the cooperation necessary to maintain reliability is compatible with the degree of competition necessary to bring about greater efficiency and lower prices. This paper draws upon our forthcoming book, Alternating Curents: Electricity Markets and Public Policy.

Suggested Citation

  • Palmer, Karen & Brennan, Timothy & Martinez, Salvador, 2001. "Implementing Electricity Restructuring: Policies, Potholes, and Prospects," RFF Working Paper Series dp-01-62-, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-01-62-
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    References listed on IDEAS

    as
    1. Brennan, Timothy J & Boyd, James, 1997. "Stranded Costs, Takings, and the Law and Economics of Implicit Constracts," Journal of Regulatory Economics, Springer, vol. 11(1), pages 41-54, January.
    2. Palmer, Karen L. & Burtraw, Dallas & Bharvirkar, Ranjit & Paul, Anthony, 2001. "Restructuring and the Cost of Reducing NOx Emissions in Electricity Generation," Discussion Papers 10549, Resources for the Future.
    3. Bohi, Douglas R. & Palmer, Karen L., 1996. "The efficiency of wholesale vs. retail competition in electricity," The Electricity Journal, Elsevier, vol. 9(8), pages 12-20, October.
    4. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    5. Palmer, Karen & Ando, Amy, 1998. "Getting on the Map: The Political Economy of State-Level Electricity Restructuring," RFF Working Paper Series dp-98-19-rev, Resources for the Future.
    6. Brennan, Timothy J., 1998. "Demand-Side Management Programs Under Retail Electricity Competition," Discussion Papers 10615, Resources for the Future.
    7. Paul L. Joskow & Edward Kohn, 2002. "A Quantitative Analysis of Pricing Behavior in California's Wholesale Electricity Market During Summer 2000," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 1-35.
    8. Green, Richard, 2003. "Failing electricity markets: should we shoot the pools?," Utilities Policy, Elsevier, vol. 11(3), pages 155-167, September.
    9. Burtraw, Dallas & Palmer, Karen L. & Bharvirkar, Ranjit & Paul, Anthony, 2001. "Cost-Effective Reduction of NOx Emissions from Electricity Generation," Discussion Papers 10677, Resources for the Future.
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    Cited by:

    1. Francesco Busato & Andrea Gatto, 2019. "Evidenze empiriche dalla volatilità dei prezzi elettrici durante la crisi energetica californiana. Cattura del regolatore nel caso Enron? (Empirical evidence on energy prices volatility during the Cal," Moneta e Credito, Economia civile, vol. 72(285), pages 29-46.
    2. Payal Malik, 2010. "Design of Power Markets : Different Market Structures and Proposed Options for India," Working Papers id:2848, eSocialSciences.

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    More about this item

    Keywords

    electricity restructuring; regulation; deregulation;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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