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A cost-benefit assessment of wholesale electricity restructuring and competition in New England

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  • Matthew Barmack
  • Edward Kahn

  • Susan Tierney

Abstract

We conduct a social cost-benefit analysis of wholesale electricity market restructuring and competition in New England. A counter-factual investment path is formulated which characterizes how the wholesale power system might have evolved in New England under continued regulation. The investment and operating costs of the counter-factual case are compared with a projected evolution of actual developments under restructuring and wholesale competition. An important contributor to restructuring benefits is improved operation of nuclear plants divested from incumbent owners under restructuring and transferred to more experienced owners. We estimate net benefits over the 18-year analysis period of about 2% of wholesale costs. Copyright Springer Science+Business Media, LLC 2007

Suggested Citation

  • Matthew Barmack & Edward Kahn & Susan Tierney, 2007. "A cost-benefit assessment of wholesale electricity restructuring and competition in New England," Journal of Regulatory Economics, Springer, vol. 31(2), pages 151-184, April.
    • Handle: RePEc:kap:regeco:v:31:y:2007:i:2:p:151-184
    DOI: 10.1007/s11149-006-9022-8
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    1. Thomas P. Lyon, 1991. "Regulation with 20-20 Hindsight: "Heads I Win, Tails You Lose"?," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 581-595, Winter.
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    3. Richard J. Gilbert & David M. Newbery, 1994. "The Dynamic Efficiency of Regulatory Constitutions," RAND Journal of Economics, The RAND Corporation, vol. 25(4), pages 538-554, Winter.
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    1. repec:aen:journl:ej38-4-ros is not listed on IDEAS
    2. Pollitt, Michael G., 2012. "The role of policy in energy transitions: Lessons from the energy liberalisation era," Energy Policy, Elsevier, vol. 50(C), pages 128-137.
    3. Kim, Jihwan & Kim, Yeonbae & Flacher, David, 2012. "R&D investment of electricity-generating firms following industry restructuring," Energy Policy, Elsevier, vol. 48(C), pages 103-117.
    4. Chen, Hao & Cui, Jian & Song, Feng & Jiang, Zhigao, 2022. "Evaluating the impacts of reforming and integrating China's electricity sector," Energy Economics, Elsevier, vol. 108(C).
    5. Kyle E. Binder & James W. Mjelde, 2017. "Fuel inventory and price relationships in the U.S. electric power sector under regulatory and market change," Journal of Regulatory Economics, Springer, vol. 51(2), pages 197-219, April.
    6. Segarra, Ignacio & Atanasova, Christina & Figuerola-Ferretti, Isabel, 2024. "Electricity markets regulations: The financial impact of the global energy crisis," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 93(C).
    7. Tilman Klumpp & Xuejuan Su, 2015. "Strategic Investment under Open Access: Theory and Evidence," Journal of Industrial Economics, Wiley Blackwell, vol. 63(3), pages 495-521, September.
    8. Khan, Muhammad T. & Thopil, George Alex & Lalk, Jorg, 2016. "Review of proposals for practical power sector restructuring and reforms in a dynamic electricity supply industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 326-335.
    9. Xuejuan Su, 2015. "Have customers benefited from electricity retail competition?," Journal of Regulatory Economics, Springer, vol. 47(2), pages 146-182, April.
    10. Bowen, William M. & Hill, Edward (Ned) & Thomas, Andrew & Liu, Ruoran & Henning, Mark, 2023. "Consumer price effects of deregulated electric generation markets: The case of Ohio and the midwestern United States," Utilities Policy, Elsevier, vol. 83(C).

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