The Political Economy Of Deregulation In The U.S. Gas Distribution Market
AbstractCauses and consequences of deregulation and restructuring in utility markets in US states continue to draw heated debate. It is unclear why different utilities choose retail restructuring, price caps or sliding-scale plans. Various economic and political reasons lend themselves to explaining regulatory decisions. This study uses a stylized capture model to formulate predictions about regulators’ net benefits from a particular form of deregulation. Empirical hazard model evaluates the revealed choice at each regulator-utility pair. Among state-level political factors, frequency and timing of commissioner re-elections, system of selection of commissioners, and party composition of the commissions and state legislatures are significant in explaining the pattern of deregulation. Utilities’ prices, capacity and scope of operations help explain the timing of deregulation. Market concentration contributes. A negative significant association between the prevalence of restructuring (and sliding-scale plans), and of price caps across utility industries is identified.
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Bibliographic InfoPaper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number 29-2010.
Length: 28 pages
Date of creation: Dec 2010
Date of revision:
gas; deregulation; restructuring; commissioner elections; hazard model;
Find related papers by JEL classification:
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-23 (All new papers)
- NEP-ENE-2011-01-23 (Energy Economics)
- NEP-POL-2011-01-23 (Positive Political Economics)
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