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The impact of restructuring and deregulation on gas rates

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Abstract

This article evaluates the impact of consumer choice programs, price caps, and sliding scale plans on consumer prices of gas using a custom survey of public service commissions and data from the Department of Energy. A seemingly unrelated regressions model estimates residential, commercial and industrial prices jointly, controlling for potentially endogenous demand. Consumer choice programs are estimated to lower residential and commercial prices significantly, by bringing competition to markets with smaller consumers. Prices fall even before deregulation as utilities build consumer loyalty and fight competition. Sliding scale plans are estimated to lower prices of small consumers while raising industrial prices. Price caps lead to overall higher prices, with unclear ranking across consumer classes.

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Authors and Affiliations

  1. Ewha Womans University, 401 Posco Building, 11-1 Daehyun-dong, Seodaemun-gu, Seoul, 120-750, South Korea

    Vladimir Hlasny

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  1. Vladimir Hlasny
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Correspondence to Vladimir Hlasny.

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Hlasny, V. The impact of restructuring and deregulation on gas rates. J Regul Econ 34, 27–52 (2008). https://doi.org/10.1007/s11149-007-9048-6

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  • DOI: https://doi.org/10.1007/s11149-007-9048-6

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