Electricity markets in transition: Market distortions associated with retail price controls

In many jurisdictions, there are growing concerns over rising electricity prices and increased price volatility due in part to aging network infrastructure, retiring generation capacity, and subsidies to promote investment in renewables. In response, policymakers have advocated for or implemented retail price controls. Yet these can foster distortions that do not directly address market failures. We discuss alternative policies that can be used to mitigate these price effects.