Economic impact of regulatory reforms in the electricity supply industry: a panel data analysis for OECD countries

This paper reexamines the impact of the regulatory reforms on price in the electricity supply industry, using panel data for 19 OECD countries for the period 1987–1999 and compares the results with those found in an earlier study by Steiner (Regulation, industry structure and performance in the electricity supply industry, OECD Economics Department Working Paper, ECO/WKP, 2000, p. 11). We found that expanded retail access is likely to lower the industrial price and increase the price differential between industrial customers and household customers, as expected. We also found that the unbundling of generation and the introduction of a wholesale spot market did not necessarily lower the price and may possibly have resulted in a higher price. This finding is not consistent with expectations and differs from Steiner (2000), but it is plausible in the light of recent experiences in many countries.