THE POLITICAL ECONOMY OF DEREGULATION IN THE U.S. GAS DISTRIBUTION MARKET

Vladimir Hlasny

ICER Working Papers from ICER - International Centre for Economic Research

Abstract: Causes and consequences of deregulation and restructuring in utility markets in US states continue to draw heated debate. It is unclear why different utilities choose retail restructuring, price caps or sliding-scale plans. Various economic and political reasons lend themselves to explaining regulatory decisions. This study uses a stylized capture model to formulate predictions about regulators’ net benefits from a particular form of deregulation. Empirical hazard model evaluates the revealed choice at each regulator-utility pair. Among state-level political factors, frequency and timing of commissioner re-elections, system of selection of commissioners, and party composition of the commissions and state legislatures are significant in explaining the pattern of deregulation. Utilities’ prices, capacity and scope of operations help explain the timing of deregulation. Market concentration contributes. A negative significant association between the prevalence of restructuring (and sliding-scale plans), and of price caps across utility industries is identified.

Keywords: gas; deregulation; restructuring; commissioner elections; hazard model (search for similar items in EconPapers)
JEL-codes: L51 L95 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2010-12
New Economics Papers: this item is included in nep-ene and nep-pol
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http://www.biblioecon.unito.it/biblioservizi/RePEc/icr/wp2010/ICERwp29-10.pdf (application/pdf)

Related works:
Chapter: The Political Economy of Deregulation in the US Gas Distribution Market (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:icr:wpicer:29-2010

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