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January 20, 2017
Study Finds That Deregulated Power Markets Decrease Cost Of Generating Power By $3 Billion A Year
FuelFix writes about a study by Steve Cicala showing how electricity markets are more cost-effective than the cost of service regulation.
By Ryan Handyvia FuelFix
Deregulated utility markets decrease the cost of generating electricity by $3 billion per year, according to a study from the Energy Policy Institute of the University of Chicago.
A majority, more than 60 percent, of power in the U.S. comes from deregulated markets, including power in most of Texas, where customers purchase power through retail electricity companies that offer different prices for power. Texas’ deregulated market went into effect in 2002.
Power companies in deregulated markets are more likely to use lower-cost power generating units, and reduce the use of power generators that cost more to run, the University of Chicago study found. The study’s conclusions are based on simulated data pooled from daily electricity operating reports from nearly every electricity generating site in the country from 1999 to 2012...