IDEAS home Printed from https://ideas.repec.org/a/ifs/fistud/v22y2001i1p107-146.html
   My bibliography  Save this article

The restructuring and privatisation of the electricity distribution and supply businesses in England

Author

Listed:
  • Preetum Domah
  • Michael G. Pollitt

Abstract

In December 1990, the 12 regional electricity companies — responsible for the distribution and supply of electricity in England and Wales — were privatised. For the first few years following privatisation, real prices, profits and costs in the industry rose. Following two Price Control Reviews, prices have now fallen sharply and there have been substantial reductions in costs and more recently in profits. This paper attempts to conduct a social cost-benefit analysis of the privatisation by examining actual and predicted falls in costs over the period to 2005. We conclude that the privatisation did yield significant net benefits but that these were unevenly distributed across time and groups in society. Relative to our preferred counterfactual, consumers experience slightly lower prices and the government gains £5 billion in sale proceeds and net taxes. However, consumers begin to gain only from 2000.

Suggested Citation

  • Preetum Domah & Michael G. Pollitt, 2001. "The restructuring and privatisation of the electricity distribution and supply businesses in England," Fiscal Studies, Institute for Fiscal Studies, vol. 22(1), pages 107-146, March.
  • Handle: RePEc:ifs:fistud:v:22:y:2001:i:1:p:107-146
    as

    Download full text from publisher

    File URL: http://www.ifs.org.uk/fs/articles/0036a.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chisari, Omar & Estache, Antonio & Romero, Carlos, 1999. "Winners and Losers from the Privatization and Regulation of Utilities: Lessons from a General Equilibrium Model of Argentina," The World Bank Economic Review, World Bank, vol. 13(2), pages 357-378, May.
    2. Richard Green & Tanga McDaniel, 1998. "Competition in electricity supply: will ‘1998’ Be worth it?," Fiscal Studies, Institute for Fiscal Studies, vol. 19(3), pages 273-293, August.
    3. David M. Newbery & Michael G. Pollitt, 1997. "The Restructuring and Privatisation of Britain's CEGB—Was It Worth It?," Journal of Industrial Economics, Wiley Blackwell, vol. 45(3), pages 269-303, September.
    4. Hogan, William W. & Walton, Steven L., 1994. "A study of the privatisation of the electricity supply industry in England and Wales," The Electricity Journal, Elsevier, vol. 6(10), pages 73-73, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mota, R.L., 2003. "The Restructuring and Privatisation of Electricity Distribution and Supply Business in Brazil: A Social Cost-Benefit Analysis," Cambridge Working Papers in Economics 0309, Faculty of Economics, University of Cambridge.
    2. Khan, Iram, 2006. "Public vs. private sector : an examination of neo-liberal ideology," MPRA Paper 13443, University Library of Munich, Germany.
    3. Michael Pollitt, 2021. "Measuring the Impact of Electricity Market Reform in a Chinese Context," Working Papers EPRG2111, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    4. Jamil, Muhammad Hamza & Ullah, Kafait & Saleem, Noor & Abbas, Faisal & Khalid, Hassan Abdullah, 2022. "Did the restructuring of the electricity generation sector increase social welfare in Pakistan?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 157(C).
    5. Christian Wolf & Michael G. Pollitt, 2009. "The Welfare Implications of Oil Privatisation: A Cost-Benefit Analysis of Norway's Statoil," Working Papers EPRG 0905, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    6. Tooraj Jamasb & Rabindra Nepal & Govinda R. Timilsina, 2017. "A Quarter Century Effort Yet to Come of Age: A Survey of Electricity Sector Reform in Developing Countries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    7. World Bank, 2005. "The Evolution of Enterprise Reform in Africa : From State-Owned Enterprises to Private Participation in Infrastructure—and Back?," World Bank Publications - Reports 8472, The World Bank Group.
    8. Paul L. Joskow, 2014. "Incentive Regulation in Theory and Practice: Electricity Distribution and Transmission Networks," NBER Chapters, in: Economic Regulation and Its Reform: What Have We Learned?, pages 291-344, National Bureau of Economic Research, Inc.
    9. Domah, P. & Pollitt, M.G., 2000. "The Restructuring and Privatisation of Electricity Distribution and Supply Businesses in England and Wales: A Social Cost Benefit Analysis," Cambridge Working Papers in Economics 0007, Faculty of Economics, University of Cambridge.
    10. David Hawdon & Lester C. Hunt & Paul Levine & Neil Rickman, 2007. "Optimal sliding scale regulation: an application to regional electricity distribution in England and Wales," Oxford Economic Papers, Oxford University Press, vol. 59(3), pages 458-485, July.
    11. Palacios M., Sebastián & Saavedra P., Eduardo, 2017. "Alternative policies for the liberalization of retail electricity markets in Chile," Utilities Policy, Elsevier, vol. 49(C), pages 72-92.
    12. John Nellis, 2006. "Privatization: A Summary Assessment," Working Papers 87, Center for Global Development.
    13. Vivien Foster & José Luis Guasch & Luis Andrés & Thomas Haven, 2008. "The Impact of Private Sector Participation in Infrastructure: Lights, Shadows, and the Road Ahead," IDB Publications (Books), Inter-American Development Bank, number 59818, February.
    14. Toba, Natsuko, 2007. "Welfare impacts of electricity generation sector reform in the Philippines," Energy Policy, Elsevier, vol. 35(12), pages 6145-6162, December.
    15. Birdsall, Nancy & Nellis, John, 2003. "Winners and Losers: Assessing the Distributional Impact of Privatization," World Development, Elsevier, vol. 31(10), pages 1617-1633, October.
    16. Thomas Haven & Luis A. Andrés & J. Luis Guasch & Vivien Foster, 2008. "The Impact of Private Sector Participation in Infrastructure : Lights, Shadows, and the Road Ahead," World Bank Publications - Books, The World Bank Group, number 6545.
    17. repec:idb:brikps:358 is not listed on IDEAS
    18. Kikeri, Sunita & Nellis, John, 2002. "Privatization in competitive sectors : the record to date," Policy Research Working Paper Series 2860, The World Bank.
    19. Riechmann, Christoph, 2000. "Strategic pricing of grid access under partial price-caps -- electricity distribution in England and Wales," Energy Economics, Elsevier, vol. 22(2), pages 187-207, April.
    20. Imam, M. & Jamasb, T. & Llorca, M. & Llorca, M., 2018. "Power Sector Reform and Corruption: Evidence from Electricity Industry in Sub-Saharan Africa," Cambridge Working Papers in Economics 1801, Faculty of Economics, University of Cambridge.
    21. Anastassios Gentzoglanis, 2002. "Privatization, Investment and Efficiency in the Telecommunications Industry: Theory and Empirical Evidence from MENA Countries," Working Papers 0230, Economic Research Forum, revised 10 Oct 2002.

    More about this item

    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ifs:fistud:v:22:y:2001:i:1:p:107-146. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emma Hyman (email available below). General contact details of provider: https://edirc.repec.org/data/ifsssuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.