This paper presents a simple analytical model to compare electricity prices under regulation and deregulation. A deregulated electricity market cannot have too many producers because they will not be able to recover their investment costs. Nor can it have too few producers because the resulting...

The last decade has witnessed efforts throughout the world to deregulate the electricity industry, with varied results. While there have been a few qualified success stories, many challenges of deregulation have come to light. These challenges can lead to negative, even disastrous, outcomes....