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Deregulation & Privatization: Texas Electric Power Market Evidence

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  • Eric L. Prentis

Abstract

The electric power industry is moving away from a regulated utility model, toward a deregulated marketbased model—thereby intending to improve system efficiency by reducing generation costs and customer prices, while at the same time improving capital expenditures and service reliability. This paper is the first in the literature to statistically test Texas’ electricity prices, relative to U.S. electricity prices—and use energy emergency alerts and reserve margin forecasts to determine Texas’ power system reliability—since deregulation in 2002. Implementation of suggested reforms will help ensure the market-based design succeeds. Recommendations are offered for future research.

Suggested Citation

  • Eric L. Prentis, 2014. "Deregulation & Privatization: Texas Electric Power Market Evidence," Review of Business and Finance Studies, The Institute for Business and Finance Research, vol. 5(2), pages 117-126.
    • Handle: RePEc:ibf:rbfstu:v:5:y:2014:i:2:p:117-126
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    References listed on IDEAS

    as
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    5. Martin Chick, 2007. "Electricity and Energy Policy in Britain, France and the United States since 1945," Books, Edward Elgar Publishing, number 3650.
    6. Zarnikau, Jay W., 2010. "Demand participation in the restructured Electric Reliability Council of Texas market," Energy, Elsevier, vol. 35(4), pages 1536-1543.
    7. Anderson, John A., 2009. "Electricity Restructuring: A Review of Efforts around the World and the Consumer Response," The Electricity Journal, Elsevier, vol. 22(3), pages 70-86, April.
    8. Ramteen Sioshansi and Ashlin Tignor, 2012. "Do Centrally Committed Electricity Markets Provide Useful Price Signals?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
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    More about this item

    Keywords

    Texas Electricity Market; Deregulation; Privatization; Reserve Margins;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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