An Analysis of Trends in Restructuring of Electricity Markets

The transition from traditional rate-of-return regulation to competition in generation in the electricity industry has been a bumpy one. While the outcome has been largely criticized, there is evidence that ratepayers in the majority of restructured states have in fact benefited, albeit less dramatically than was originally predicted, from their state's restructuring initiatives. Nonetheless, as regulated and restructured states move forward, there are lessons from the experience that should inform future restructuring efforts.