Institutional objectives, structural barriers, and deregulation in the electric-utility industry
Regulation is not in vogue. Rarely preferred by traditional economists as an instrument of allocation, regulation has fallen into disrepute with politicians and a broad cross-section of the populace. Deregulation has become the popular nostrum for the economic malaise affecting the nation. And by legislative enactment or administrative fiat, regulatory controls recently have been scaled back in many areas, including transportation, energy, telecommunications, financial services, product and workplace safety, and environmental protection. With the rising tide of concern over ''excessive government," one should not be surprised that deregulation has become a topic of interest among those who observe and participate in one of the nation's most intensely regulated industries, the electric utility industry.' Though the current debate over electric utility deregulation is still in the formative stages, the dimensions of various deregulatory options have started to crystalize. The purpose of this article is to review the alternative deregulatory proposals within the context of concerns common to many institutional economists and against the backdrop of the current structural realities of the electric utility industry.