Electricity Restructuring, Consumer Prices and the Cost of Capital: Lessons for the Modeling of Future Policy

Electricity industry restructuring in both the United Kingdom and the United States failed to produce the expected lower prices to consumers, and the industry now is reverting to regulatory-like mechanisms to attract capital for the construction of new power plants. This analysis focuses on factors, unanticipated by system-analysts and policy-makers, which may be responsible for these outcomes.