Copyright (c) 1998 Federal Energy Bar Association
Energy Law Journal
ARTICLE: COMPETITION BETWEEN PUBLIC AND PRIVATE DISTRIBUTORS OF ELECTRICITY IN A RESTRUCTURED POWER INDUSTRY
19 Energy L. J. 333
Harvey L. Reiter *
Hardly a day goes by anymore when the general press does not offer some story about the new world of electric competition. In many states where retail electric "choice" plans are about to be implemented, one can hear ads on radio and television touting the advantages of various electric suppliers. For years, the only significant competitive battles being waged in the electric utility industry were between public and private electric systems. Those of us old enough to remember may even recall the defense typically offered by private utilities against charges of anticompetitive conduct in so-called "price squeeze" 1 cases during the late 1970s and early 1980s. The supplying utilities would often argue they could not be acting anticompetitively because, with the possible, limited exception of competition for the patronage of aluminum processors, there was no such thing as retail competition in the electric business! 2
That competition in the retail sale of electric power is now accepted by many private utilities not only as inevitable, but as a desirable goal, however, does not render the debates about the benefits of public/private electric competition matters of only historic interest. It is true that discussions about competition for the supply of power - what some economists call "competition in the market" - no longer are logically confined to choices between public and private utility providers. Delivery or distribution services, 3 however, remain natural monopolies subject to regulation - and to limited, but statutorily protected "competition for the market," i.e., for ...
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