Evaluating the British Model of Electricity Deregulation

32 Pages Posted: 20 Sep 2004

Abstract

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.

Suggested Citation

Thomas, Stephen, Evaluating the British Model of Electricity Deregulation. Annals of Public & Cooperative Economics, Vol. 75, No. 3, pp. 367-398, September 2004. Available at SSRN: https://ssrn.com/abstract=591394

Stephen Thomas (Contact Author)

University of Greenwich ( email )

30 Park Row
Greenwich
London, SE10 9LS
United Kingdom

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