Lost Economies of Integration and the Costs of Creating Markets in Electricity Restructuring: Evidence from Ontario

The public good nature of bulk grid electricity leads to a twist on the economic debate about oligopoly and economies of scale and scope. In contestability theory, the introduction of “competitive conditions” aims to reduce oligopoly rents; in the case of Ontario, it seems that the attempt to create a “competitive market” has created new opportunities for rent accrual.