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The Electric Side of Combination Gas-Electric Utilities

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  • Paul S. Brandon

Abstract

This paper assesses the effects of combination gas-electric utilities on income redistribution and economic efficiency. It finds that such combinations appear to exercise greater market power than straight electric utilities. A series of regression equations shows that they earn higher rates of return than straight electric companies in spite of regulation. Promotional expenditures are strikingly lower, and consumption of electricity by customers is also lower. $70 to $80 million per year is estimated to be redistributed from combinations' customers to their owners. The economic loss from the monopoly power of combinations may be on the order of $300 million per year.

Suggested Citation

  • Paul S. Brandon, 1971. "The Electric Side of Combination Gas-Electric Utilities," Bell Journal of Economics, The RAND Corporation, vol. 2(2), pages 688-703, Autumn.
    • Handle: RePEc:rje:bellje:v:2:y:1971:i:autumn:p:688-703
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