Regulation of Utility Industries in the United States

This book consists of three studies. The first evaluates the impact of regulation on natural gas prices. Consumer choice plans are estimated to lower prices greatly, by bringing competition to markets with smaller consumers. Prices fall even before deregulation as utilities build consumer loyalty and fight competition. Sliding scale plans lower small-consumer prices while raising industrial prices. Price caps lead to overall higher prices, with unclear ranking across consumer classes. The second study assesses damages caused by SO2 concentrations under three policies leading to same aggregate emissions: caps, tax & tradable permits. Regional concentrations are found to vary across policies. This variation translates into different losses for each state and, nationwide, to differences of hundreds of millions of dollars. Caps yield the lowest total damages, outperforming taxes & permits by $452m. Caps favor southern states, where they deliver $840m lower damages than the other policies, while they deliver $390m higher damages in the north. The third study verifies these results under alternative assumptions on the impact of SO2 on health.