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Electric Choices


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Table of Contents

Chapter 1 1 Introduction Chapter 2 2 Can Electricity Restructuring Survive? Lessons from California and Pennsylvania Chapter 3 3 The Role of Retail Pricing in Electricity Restructuring Chapter 4 4 Using Experiments to Inform the Privatization/Deregulation Movement in Electricity Chapter 5 5 The Alberta Experience Chapter 6 6 Transactions Costs and the Organization of Coordination Activities in Power Markets Chapter 7 7 Market-Based Transmission Investments and Competitive Electricity Markets Chapter 8 8 Checking for Market Power in Electricity: The Perils of Price-Cost Margins Chapter 9 9 The Role of Distributed Energy Resources in a Restructured Power Industry Chapter 10 10 Blackout Economics

About the Author

Andrew N. Kleit is professor of energy and environmental economics at the Pennsylvania State University. He has been an economist for the Federal Trade Commission and the Council of Economic Advisers. Dr. Kleit is the coeditor of Competition Policy Enforcement: The Economics of the Antitrust Process (1996).


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
This excellent book provides an agenda out of the impasse in which 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
Electric Choices should be mandatory reading for anyone interested in the electricity industry, and who wants 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 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
Electric Choices provides 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. This book will move the reader beyond the electricity-restructuring impasse in the aftermath of the California debacle and the Northeast Blackout to find areas where deregulation is likely to be desirable. -- Peter M. Schwarz, Global Institute of Energy and Environmental Systems, University of North Carolina at Charlotte
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
This collection by leading authorities on electricity industry restructuring should be valuable reading for those interested in learning from previous successes and failures in this important area of public policy. It contains both broader analytical pieces and case studies in the U.S. and abroad. The papers provide not only specific policy reforms but also methods by which to design and evaluate them. The coverage is broad, including creation of pricing innovations, demand-side behavior, the role of coordinating agents, investment decisions, distributed generation, and reliability. The volume should be of interest to analysts, business managers in a variety of industries, electricity customers, and public-policy makers. I recommend this book to all those interested in exploring both the larger issues and the subtleties of the topic, no matter which side of the policy debate they favor. -- Adam Rose, Professor of Energy, Environmental and Regional Economics, Department of Geography, Pennsylvania State University
This insightful work covers the major challenges still facing electricity restructuring, showing both the dangers and possibilities associated with regulatory change. Its breadth is impressive, as there are contributions on such diverse topics as market design, wholesale market power, transmission investment, system reliability, demand-side management, and the role of distributed generation. -- James D. Reitzes, Principal, The Brattle Group
Contributors to this volume are of high qualtiy and offer signicant insight into the way forward in the electric utility industry. This publication should be of interest to scholars, utility executives, and policy makers. Highly recommended. * CHOICE *

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