Timidity in electric utility deregulation

Abstract

Reform proposals for electric power have centered around facilitating private provision of electricity. While such private provision may be desirable, its facilitation is inadequate to deal with the defects of electric power regulation. A number of economists have complained about the inherent defects of regulation. A range of suggestions has appeared. The alternatives include total deregulation, separating generation from transmission and distribution and deregulating generation, allowing competition in distribution, and reforming the existing regulatory process. Merely aiding power purchase is inadequate reform from any of the broader perspectives. Regulation has involved increased controls that have aggravated problems of maintaining profitability in a more uncertain market environment. Utility response has been to lessen greatly its commitments to continued expansion.