When Does Regulation Distort Costs? Lessons from Fuel Procurement in US Electricity Generation

• 成果类型: Article
• 署名作者: Cicala, Steve
• 署名单位: University of Chicago
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20131377
• 发表日期: 2015
• 页码: 411-444
• 关键词: PRESSURE GROUPS; COMPETITION; MARKETS; deregulation; EFFICIENCY; BEHAVIOR; POWER; coal

摘要

This paper evaluates changes in fuel procurement practices by coal -and gas-fired power plants in the United States following state-level legislation that ended cost-of-service regulation of electricity generation. I find that deregulated plants substantially reduce the price paid for coal (but not gas) and tend to employ less capital-intensive sulfur abatement techniques relative to matched plants that were not subject to any regulatory change. Deregulation also led to a shift toward more productive coal mines. I show how these results lend support to theories of asymmetric information, capital bias, and regulatory capture as important sources of regulatory distortion.