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Electricity reform and retail pricing in Texas

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  • Hartley, Peter R.
  • Medlock, Kenneth B.
  • Jankovska, Olivera

Abstract

Electricity market reforms have pursued two goals, both aimed at increasing economic efficiency. The first is to ensure that suppliers minimize costs. The second is to make prices more reflective of marginal costs. We use data from Texas to examine whether post-reform retail prices have better reflected wholesale prices, and whether reform has reduced retailer costs. We find clear evidence of both outcomes in competitive market areas but not in non-competitive areas supplied by municipally-owned utilities or co-operatives.

Suggested Citation

  • Hartley, Peter R. & Medlock, Kenneth B. & Jankovska, Olivera, 2019. "Electricity reform and retail pricing in Texas," Energy Economics, Elsevier, vol. 80(C), pages 1-11.
    • Handle: RePEc:eee:eneeco:v:80:y:2019:i:c:p:1-11
    DOI: 10.1016/j.eneco.2018.12.024
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    Cited by:

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    6. Juan C. Percino-Picazo & Armando R. Llamas-Terres & Federico A. Viramontes-Brown, 2021. "Analysis of Restructuring the Mexican Electricity Sector to Operate in a Wholesale Energy Market," Energies, MDPI, vol. 14(11), pages 1-26, June.
    7. Brown, D.P. & Tsai, C.H. & Woo, C.K. & Zarnikau, J. & Zhu, S., 2020. "Residential electricity pricing in Texas's competitive retail market," Energy Economics, Elsevier, vol. 92(C).
    8. Wang, Li & Zhang, Xin-Hua & Zhang, Yue-Jun, 2023. "Designing the pricing mechanism of residents’ self-selection sales electricity based on household size," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 860-878.
    9. Enriquez, Alejandra & Ramirez, Jose Carlos & Rosellon, Juan, 2019. "Costos De Generación, Inversión Y Precios Del Sector Eléctrico En México [Generation Costs, Investment And Prices In The Electricity Sector In Mexico]," MPRA Paper 98084, University Library of Munich, Germany.
    10. Mohsin, Muhammad & Hanif, Imran & Taghizadeh-Hesary, Farhad & Abbas, Qaiser & Iqbal, Wasim, 2021. "Nexus between energy efficiency and electricity reforms: A DEA-Based way forward for clean power development," Energy Policy, Elsevier, vol. 149(C).
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    More about this item

    Keywords

    Electricity market reform; Retail prices; Competition; Government-owned utilities; Shareholder-owned utilities; Cross-subsidization;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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