Store: An Independent Institute Book
Co-publisher: Rowman and Littlefield Publishers, Inc.
23 Figures • 11 Tables
© 2007 |
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ELECTRIC CHOICES
Deregulation and the Future of Electric Power
Edited by
Andrew N. Kleit
Foreword by
Pat Wood III
Electricity is one of the biggest industries in the U.S. economy, with sales exceeding $200 billion annually. While electricity represents the backbone of commerce, industry, and household production, the structure of the industry has been changing in rather dramatic ways. After being heavily regulated for more than a century by local, state, regional and federal authorities, deregulation is taking center stage.
In general, deregulation results in lower prices, more product choices, and more rapid technological advances. Conversely, rate regulation has inherent flaws, including the encouragement of waste and inefficiency, and a retarding of innovation. There is little doubt to the contributors of this book that putting regulation aside offers enormous efficiency gains in the production of electricity.
But can forces handle the delicate matter of transmitting electricity when the simple model of supply and demand must be more precise than other goods and services? How much regulation does the electric industry need? Electric Choices explores these difficult questions and proposes a new, market-based plan to improve America’s electrical future.
Detailed Summary |
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Table of Contents
Foreword
Pat Wood, III
1. Introduction
Andrew Kleit
2. Can Electricity Restructuring Survive? Lessons from California and Pennsylvania
Andrew Kleit and Timothy Considine
3. The Role of Retail Pricing in Electricity Restructuring
Lynne Kiesling
4. Using Experiments to Inform the Restructuring of the Electricity Industry
Vernon Smith, Steven Rassenti and Bart Wilson
5. The Alberta Experience
Joseph Doucet, Andre Plourde and Terry Daniel
6. Transactions Costs and Organization of Coordinated Activities in Power Markets
Craig Pirrong
7. Market-Based Transmission Investments and Competitive Electricity Markets
William Hogan
8. Checking for Market Power in Electricity: The Perils of Price-Cost Margins
Timothy Brennan
9. The Role of Distributed Energy Resources in a Restructured Power Industry
David E. Dismukes
10. Blackout Economics
Lynne Kiesling and Michael Giberson Praise for Electric Choices “This excellent book provides an agenda out of the impasse the U.S. has found itself following the California energy debacle and the wider crisis in electric power. Electric Choices is a must read.”
—Pablo T. Spiller, Professor of Business and Technology, University of California, Berkeley
“Recommended Reading on Energy: Numerous lessons can be learned from the electricity deregulation debacle in California and elsewhere. Electric Choices thoroughly examines these cases to help readers learn from those mistakes. It provides an excellent synthesis of the current perspectives that shape the national debate on electricity restructuring.”
—Wall Street Journal
"Electric Choices should be mandatory reading for anyone interested in the electricity industry, and who want to learn from the mistakes California made. These leading experts explain why and how well-run markets are the best deal electricity customers are going to find."
—G. Mitchell Wilk, former President, California Public Utilities Commission
“Electric Choices, edited by Andrew Kleit, is a book that makes a strong case that our electric power industry could be significantly more consumer-friendly, reliable, and efficient if it were guided more by the invisible hand of the market than the all-too-visible and usually clumsy hand of state and federal regulation. . . . The book gives the reader a comprehensive look at our electrical generation and transmission systems, with special emphasis on the inefficiencies of state and federal regulation. . . . [This is] a book packed with insights into the problems with our current mode of electricity regulation and the possibilities for a brighter future if we can break through the inertia that protects the status quo. Since that inertia is at least partly rooted in the fact that few people have ever considered the benefits we would derive from an electricity market with far less government control, Professor Kleit’s eye-opening book is extremely welcome.”
—Regulation
“Electric Choices is a first-rate book featuring some of the nation's leading energy analysts and belongs on the bookshelf of every scholar, policy wonk and utility executive.”
—Ahmad Faruqui, Principal, The Brattle Group
“Electric Choices provides convincing theoretical, experimental, and empirical support for forging ahead to achieve efficiencies that will not come about in a regulated environment where utilities expect to recover their costs-plus profit and have few incentives to respond energetically to customer demand.”
—Peter M. Schwarz, Global Institute of Energy and Environmental Systems, University of North Carolina at Charlotte
“Electric Choices, with the Independent Institute as the driving force behind this edited volume, is in the pro-market wing of the pro-restructuring camp. The editor, in his introduction, presents a balanced and qualified case for restructuring, acknowledging both its opportunities and challenges. . . . Electric Choices has some interesting and thought-provoking chapters, accessible to specialists and generalists alike.”
—The Energy Journal
“Electric Choices is a superb book that addresses what we have learned from restructuring experiences to date and presents important methods from economics with which to analyze these basic questions."
—Peter Cramton, Professor of Economics, University of Maryland
“The excellent book, Electric Choices, describes the promises of electricity deregulation, the mistakes made in the past, and the path to workable competition in this industry. Highly recommended.”
—Richard J. Gilbert, former U.S. Deputy Assistant Attorney General; Professor of Economics, University of California, Berkeley
“Electric Choices brings together superb analyses of the current state of play by some of the most important contributors to the on-going restructuring debate in the United States. The book provides a readable and stimulating assessment of what has worked, and what hasn't worked, in restructuring thus far. In doing so, the book provides a set of arguments from various perspectives to support its main thesis that developments in technology and market governance now, more than ever, allow and require that we move beyond the balkanized interests that have been delaying competition to garner the immense benefits of competition in wholesale and retail power markets.”
—Paul R. Kleindorfer, Anheuser Busch Professor of Management Science Emeritus, University of Pennsylvania; Distinguished Research Professor, INSEAD
"If one accepts the premise that the current underlying conditions of electricity systems are untenable in the long run, then one is left . . . . to learn from others’ successes and failures in the restructuring and deregulation of their electricity sectors. Supporters of this approach will find much food for thought in Electric Choices, a collection of jargon- and ‘Greek letter-’ free essays edited by Pennsylvania State University economist Andrew Kleit. As can be expected from a book published by the Independent Institute, the various authors do not ask whether the electricity sector should be deregulated, but rather how it should be. . . . In short, the authors argue that not all electricity restructuring experiences were the same (if California was a disaster, Pennsylvania proved that it could work); that deregulation can deliver lower prices, a better use of scarce resources and increased consumer choice; that a working price system will send the right signals to both consumers and investors; and that blackouts will be a thing of the past in freer markets. . . . . These are contributions penned by and for serious students of energy markets. As the editor points out, electricity markets are extremely complicated, and the book’s content reflects this reality.”
—Canadian Geographer About the Editor Andrew N. Kleit is Professor of Energy and Environmental Economics at Pennsylvania State University and has been an economist with the President’s Council of Economic Advisors and the Federal Trade Commission.
About the Foreword Author
Pat Woods III is the former Chairman of the Federal Energy Regulatory Commission.
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