Competition and the Electric Utility Industry: An Evaluation

Abstract

Electric utilities have historically been granted monopoly franchises to take advantage of the cost benefits of centralized production. In return for the monopoly franchise, the utility gave the state the right to regulate price and quality of service. In recent years, many have begun to question whe-ther cost advantages of centralized production continue to exist in the electric utility industry. Legislation has been proposed that would deregulate the industry and allow greater competition.