An Evaluation of Electricity Market Restructuring: Analysis Based in the U.S. and Canada

Abstract

What factors affect electricity rates in the electricity market? This is a simple question with a complicated answer. The use of electricity is very universal. Electricity is one of the sources for of progress for human civilization. Wherever there is a market, there is some competition. However, some industrial fields are resistant to competition. The electricity market is one of them. In electricity markets, deregulation has been undertaken for more than two decades. The purpose of this paper is to examine how the deregulation of the electricity markets in the U.S. and Canada affects electricity rates. In the statistical tests, I set four different rates as dependent variables：total rates, residential rates, commercial rates and industrial rates. The estimation results reveals that electricity deregulation in the U.S. and Canada is a failed experiment and the costs are borne by the residential consumers. Unexpectedly, commercial and industrial consumers are not affected by deregulation based on the test results.