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Issues and Options for Restructuring Electricity Supplies Industres

David Newbery

Paper  527kb pdf

Until recently the Electricity Supply Industry (ESI) was typically vertically integrated
with a franchise monopoly to be the sole supplier of electricity in each region. It was,
with few exceptions, under public ownership, either by the state and/or municipal
governments. The past decade has seen a dramatic change in views about how the ESI
should be owned, organised and regulated (Newbery, 1997a; 2000). As a result, there is
a growing list of experiments in restructuring and reform to study. We are now in a
better position to reflect on the lessons learned, to identify the most important issues that
need to be addressed, and the options that should be considered. Perhaps the most
important lesson is that models which appear to work well in some circumstances and
places may not be easily transferable to countries facing different circumstances. The
performance of particular models needs to be interpreted in the light of their special
circumstances. Choosing the right reform strategy is more challenging than early
optimists claimed. The experiences of California, South East Asia, and Brazil, have been
salutary, and underlines the importance of careful analysis of what works, what can go
wrong, and why.

About the Author

David Newbery
Professor of Economics
Cambridge University

Publication Information

Type Network Papers
Program Privatization
Download 527kb pdf
Posted 02/01/10