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Structural Reform in Electric Power

A Framework for Analysis

by Herman Quirmbach, Jan Paul Acton

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The electric utility industry is attracting attention as a candidate for deregulation. This report identifies the core economic functions that the electric supply industry must fulfill, whether it operates under its current regulatory structure or one that is substantially less regulated. Having identified these core functions, the authors suggest ways to evaluate short-run efficiency and long-run efficiency gains that may occur in both the current environment and under the alternative suggestions for deregulation. They do not attempt to provide detailed evaluations of the alternatives, but rather suggest a framework within which the alternatives can be judged. The report includes a brief review of four recent policy developments that provide some insight and confirmation for the conjectures the authors develop.

This report is part of the RAND Corporation Report series. The report was a product of the RAND Corporation from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.

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