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Have Customers Benefited from Electricity Retail Competition?

Xuejuan Su ()

No 2012-21, Working Papers from University of Alberta, Department of Economics

Abstract: Compared to traditional cost-of-service (COS) regulation, electricity retail competition may lead to lower costs but higher markups. Thus, the net effect on electricity retail prices is ambiguous. This paper uses a difference-in-difference approach to estimate the impact. The results suggest that in restructured states, only residental customers have benefited from significantly lower prices but not commercial or industrial customers. Furthermore, this benefit is transitory and disappears in the long run. Overall, retail compettion does not seem to deliver lower electricity prices to retail customers across the board or over time.

Keywords: electricity; restructuring; retail competition; difference-in-difference (search for similar items in EconPapers)
JEL-codes: D42 D43 K23 L52 Q48 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2012-10-01, Revised 2014-10-01
New Economics Papers: this item is included in nep-com and nep-ene
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