Open access in the power industry: competition, cooperation, and policy dilemmas

Article Abstract:

Both competition and cooperation among electric utilities pose risks to efficiency, consumer welfare and the public interest. The Federal Energy Regulatory Commission needs to assess the welfare implications of allowing generating companies access to shared transmission lines because cooperation may undermine the anticipated benefits of competition. If competition results in the duplication of facilities, deregulation may not result in consumer welfare gains. Recovery of the stranded costs incurred by existing utilities must also be addressed to avoid imposing a disproportionate burden on smaller consumers.

Economic aspects, Monopolies

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Antitrust, joint ventures, and electric utility restructuring: RTGs and Poolcos

Article Abstract:

Antitrust enforcement agencies must allow electric utilities some leeway in developing more competitive and cost-effective alternatives to existing power generation and distribution systems. With the Federal Energy Regulatory Commission proposing that access to transmission lines be opened up to all, some utilities and some states wish to respond by creating cooperative ventures. Deregulation will serve to limit the regulatory antitrust defenses available to utilities. Antitrust enforcers must allow cooperative behavior to the extent that welfare and efficiency benefits will result.

Laws, regulations and rules, Mergers, acquisitions and divestments, Joint ventures

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Measuring market power in electric generation

Article Abstract:

Models based on simulated electricity market behavior are likely to prove more informative and valuable to antitrust enforcers in assessing mergers and other market share changes that will result from electric utility deregulation. Traditional market power measures, such as the Herfindahl-Hirschmann index, may tend to chill procompetitive mergers and acquisitions following the breakup of utility monopolies by overstating market power. Simulations of pricing behavior can be developed that will more effectively assess the potential for anticompetitive behavior.

Market share

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