Restructuring, Competition and Regulatory Reform in the U.S. Electricity Sector

The U.S. electricity sector is going through dramatic changes. The changes are expanding competition in the generating segment of the industry, making it possible for consumers to choose among competing generation service suppliers, and reforming the regulation of remaining monopoly segments. The paper discusses current industry structure and regulation, its historical performance, and the sources of political pressures for change. It examines important industry restructuring and regulatory reform issues, including the organization of competitive generation markets, transmission access and pricing, generation market power, and the application of incentive regulation mechanisms to the transmission and distribution segments.