Will Electricity Market Reform Likely Reduce Retail Rates?

Chi-Keung Woo and Jay Zarnikau ()

The Electricity Journal, 2009, vol. 22, issue 2, 40-45

Abstract: To win public support, proponents for electricity market reform to introduce competition often promise that the post-reform retail rates will be lower than the average embedded cost rates that would have prevailed under the status quo of a regulated monopoly. A simple economic analysis shows that such a promise is unlikely to occur without the critical assumption that the post-reform market has marginal costs below average costs.

Date: 2009
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