Measuring Market Power in a State with a Dominant Supplier: A Case Study

There is no guarantee that electric restructuring will bring the expected price benefits in a state with a dominant firm and significant transmission constraints. Reducing the dominant firm’s market share is done most easily if the company voluntarily agrees to divest a portion of its generation in return for favorable regulatory treatment. If a voluntary agreement between the state and the firm cannot be reached, reducing the dominant firm’s market share is much more difficult.