Successes and Failures in Regulating and Deregulating Utilities

Successes and Failures in Regulating and Deregulating Utilities

Evidence from the UK, Europe and the USA

Edited by Colin Robinson

This book is the latest annual review of utility regulation and deregulation, published in association with the Institute of Economic Affairs and the London Business School

Chapter 9: Gas, electricity and the energy review

Colin Robinson

Subjects: economics and finance, competition policy, public finance, public sector economics


Colin Robinson A TEXT In 1993, Michael Beesley contributed a Foreword to a paper I had written about energy policy.1 In it, he said, One of the abiding problems in establishing the credibility of economists in real government or business decisions is that their predominantly neo-classical training both encourages the idea of playing God in the machine and diverts them from studying how markets develop, not least in response to attempts to coerce them. That is an appropriate text for this chapter because it discusses an apparent revival of attempts to ╩╗play God in the machine╩╝ in energy markets. THE YEAR OF ENERGY POLICY 2002 was the year in which energy policy returned. In earlier postwar times, from the late 1950s to the early 1980s, energy policy was a subject of some importance, meriting a specialist government department to administer it: the Ministry of Fuel and Power, the Ministry of Power and the Department of Energy. But, about 20 years ago, Nigel Lawson, then Secretary of State for Energy, killed the extant form of energy policy, as I shall explain. The year 2002 has seen not so much a resurrection from the dead as a reincarnation: it has been more like the transference of the soul of energy policy into a new body which has a rather different appearance from the one that went six feet under in the early 1980s. It bears some resemblance to what went before but it has been spruced up to reflect present-day concerns. Its...

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