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The British Experience Of Privatization And Regulation Of The Electricity Industry, And Some Lessons For The Philippines

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  • Peter Stubbs
  • Rafael E. A. MacAtangay

Abstract

The electricity industry was the UK's biggest privatization. It was complex, since part of the industry was a natural monopoly, but some of it could be broken up into competing enterprises. Service imperatives and political considerations inhibited the optimum break-up of generation. Efficiency has improved and real prices have fallen since divestiture, but it is arguable how much scope for radical competitive improvement remains. Imminent reforms under NETA are controversial and, some economists claim, misconceived, risking a new system, like the old, implemented without enough forethought. The Philippines electricity system urgently needs reform, though privatization is problematic, given existing long-term highcost supply contracts. However, reform proceeds, having absorbed some lessons from UK experience: generation has more players, and spatial pricing and separate buyer bidding should avoid some pitfalls of the UK pool. Problems of capital scarcity, imperfections in market information and ineffectual competition policy are likely to empower existing players.

Suggested Citation

  • Peter Stubbs & Rafael E. A. MacAtangay, 2002. "The British Experience Of Privatization And Regulation Of The Electricity Industry, And Some Lessons For The Philippines," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 7(1), pages 113-136.
    • Handle: RePEc:taf:rjapxx:v:7:y:2002:i:1:p:113-136
    DOI: 10.1080/13547860120110498
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    References listed on IDEAS

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    1. Mark Armstrong & Simon Cowan & John Vickers, 1994. "Regulatory Reform: Economic Analysis and British Experience," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510790, December.
    2. John Vickers & George Yarrow, 1988. "Privatization: An Economic Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262720116, December.
    3. Helm, Dieter & Jenkinson, Tim (ed.), 1998. "Competition in Regulated Industries," OUP Catalogue, Oxford University Press, number 9780198292524.
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