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Market Restructuring, Competition and the Efficiency of Electricity Generation: Plant-level Evidence from the United States 1996 to 2006

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  • J. Dean Craig
  • Scott J. Savage

Abstract

This paper examines the effects of market restructuring initiatives that introduced competition into the United States electricity industry on the thermal efficiency of electricity generation. An empirical model is estimated on annual data for over 950 plants from 1996 to 2006. Model estimates show that access to wholesale electricity markets and retail choice together increased the efficiency of investor-owned plants by about nine percent and that these gains stem from organizational and technological changes within the plant. Although not directly targeted by restructuring initiatives, similar efficiency gains are also found for municipality-owned plants. This result suggests that the potential benefits from competition have spilled over to public electricity generation.

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  • J. Dean Craig & Scott J. Savage, 2013. "Market Restructuring, Competition and the Efficiency of Electricity Generation: Plant-level Evidence from the United States 1996 to 2006," The Energy Journal, , vol. 34(1), pages 1-32, January.
    • Handle: RePEc:sae:enejou:v:34:y:2013:i:1:p:1-32
    DOI: 10.5547/01956574.34.1.1
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    References listed on IDEAS

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    1. James P. Ziliak & David N. Figlio & Elizabeth E. Davis & Laura S. Connolly, 2000. "Accounting for the Decline in AFDC Caseloads: Welfare Reform or the Economy?," Journal of Human Resources, University of Wisconsin Press, vol. 35(3), pages 570-586.
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    1. Jose Miguel Abito & Jin Soo Han & Jean‐François Houde & Arthur A. van Benthem, 2024. "Agency Frictions and Procurement: New Evidence from U.S. Electricity Restructuring," Journal of Industrial Economics, Wiley Blackwell, vol. 72(1), pages 20-48, March.

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