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Evaluating the British Model of Electricity Deregulation
Author(s) -
Thomas Stephen
Publication year - 2004
Publication title -
annals of public and cooperative economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.526
H-Index - 37
eISSN - 1467-8292
pISSN - 1370-4788
DOI - 10.1111/j.1467-8292.2004.00256.x
Subject(s) - deregulation , incentive , monopoly , industrial organization , electricity , electric power industry , economics , vertical integration , market economy , competition (biology) , business , engineering , ecology , electrical engineering , biology
** : A key aspect of the 1990 reforms to the British electricity supply industry was the introduction of a formal system of regulation by an autonomous regulatory body. It was expected that replacement of monopolies in some areas by markets and price‐setting in monopoly areas using a simple incentive formula would mean that regulation of the industry would be ‘light’. This article examines how regulation has turned out in practice. It concludes that the promise of ‘light’ regulation has not been fulfilled. Regulation of competitive markets is a major regulatory activity, incentive regulation has evolved into a complex and intrusive form of rate‐of‐return, while regulation of industry structure has allowed the industry to descend into a concentrated, vertically integrated structure, at odds with the aims of the reforms .