IDEAS home Printed from
   My bibliography  Save this article

Deregulation in the Electric Utility Industry: Excess Capacity and the Transition to a Long‐Run Competitive Market


  • Eric Thompson
  • Frank Scott
  • Mark Berger


ABSTRACT Existing analyses of electricity deregulation have focused on situations where horizontal market power is present. This paper instead evaluates a market where a competitive outcome is more likely. Competitive market supply and demand curves for electricity have been simulated for a twenty‐state region. These simulated supply and demand curves are used to predict short‐run and long‐run prices for electric power. Many consumers will see a drop in the portion of their electric bills accounted for by the current economic costs of supplying them with electricity. Adjustments to consumers’ bills for stranded cost recovery will be determined by legislators and regulators on a state‐by‐state and utility‐by‐utility basis. Because of excess capacity that currently exists in the industry, the decline in prices will be greater in the short run than in the long run.

Suggested Citation

  • Eric Thompson & Frank Scott & Mark Berger, 2004. "Deregulation in the Electric Utility Industry: Excess Capacity and the Transition to a Long‐Run Competitive Market," Growth and Change, Wiley Blackwell, vol. 35(1), pages 1-20, February.
  • Handle: RePEc:bla:growch:v:35:y:2004:i:1:p:1-20
    DOI: 10.1111/j.0017-4815.2004.00235.x

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Ando, Amy Whritenour & Palmer, Karen L., 1998. "Getting on the Map: The Political Economy of State-Level Electricity Restructuring," Discussion Papers 10643, Resources for the Future.
    2. Bolle, Friedel, 1992. "Supply function equilibria and the danger of tacit collusion : The case of spot markets for electricity," Energy Economics, Elsevier, vol. 14(2), pages 94-102, April.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:growch:v:35:y:2004:i:1:p:1-20. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley Content Delivery). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.