Measuring and Explaining Electricity Price Changes in Restructured States

Putting the Potential Rate Impacts of Distributed Solar into Context

“…Those regions both have relatively high proportions of gas-fired generation as well as restructured power markets, which, for reasons discussed in Section 4.2, are particularly sensitive to changes in gas prices. Not surprisingly, econometric analyses of retail prices over this period consistently find strong positive relationships between state-level electricity prices and either natural gas prices or the proportion of electricity generated from gas (Fagan 2006, Joskow 2006, Ros 2015, Su 2015, Swadley and Yucel 2011, Taber et al 2006, Zarnikau and Whitworth 2006.…”

Effect of Utility Deregulation and Mergers on Consumer Welfare

“…These included studies by Cambridge Research Associates (CRA) [15] , Joskow [16] , Taber, Chapman and Mount [17] , Fagan [18] , and Law and Consulting Group [19] . These studies provided little evidence of gains in efficiency or benefits due to deregulation in the United States [20] .…”

Have customers benefited from electricity retail competition?

“…Borenstein and Holland (2005) and Tirole (2006, 2007) discuss the importance of replacing traditional electric meters with real-time meters to improve efficiency in the electricity retail market. 8 Fagan (2006) acknowledges that the result is preliminary as "the impact of restructuring on prices was still evolving in the post-restructuring period examined. Most states were (and still are) in the transition period where rates are set by a mix of competitive and regulatory forces."…”

“…15 As shown in Table 1, the number of states (excluding the 12 www.eia.gov/electricity/data.cfm. 13 Besides their relative size, the three segments differ in other characteristics as well.…”

“…On the other hand, pilot programs are not considered official restructuring policies. 15 This is a more restrictive measure of restructuring for two reasons. First, if a state implements retail competition for industrial or commercial customers before it does so for residential customers, or introduces retail competition in For each state, we also divide the entire restructuring period into a transitional period and the period afterwards.…”