Regional disparities in pricing strategies of electric utilities

There has been considerable disparity in pricing practices across electricity markets in the United States over the past two decades. The greatest contrast in environment which produces different pricing strategies exists between the Midwest and the East. Electric utilities have used promotional rates for reasons either to stimulate the local economy, to reduce excess capacity, or to attract new industry. The purpose of this paper is to identify factors affecting pricing strategies of electric utilities. We also attempt to identify the differences in pricing strategies between electricity firms in the East and in the Midwest.