Energy Deregulation Essay

This essay will detail the impact of EU liberalisation policy on the UK energy industry and relate this to a previous sample of a group of suppliers. This essay will discuss industry supplier concentration, oligopoly and monopolistic competition, the EU competition commission and potential single markets which are not yet subject to scrutiny by the competition commission.

Many utilities are monopolies by having the entire market share in certain areas. With deregulation of these utilities, the market becomes open to competition for market share to begin. In terms of regulation of monopoly, the government attempts to prevent operations that are against the public interest, call anti-competitive practices. Likewise, oligopoly is a market condition where there are minimal distributors that have a major influence on prices and other market factors. This causes market failure, especially if evidence of collusive behavior by dominant businesses is found.

The low price elasticity of demand for household energy given the lack of easy alternatives means that consumers will continue to purchase it even when prices rise drastically as we can see from extract A they did over the three year period. Furthermore the complex pricing structures in the energy market make it difficult for consumers to exercise any consumer sovereignty because they lack the information or indeed don’t know how to interpret it, to make a decision which is in their best interest.

The public interest theory of regulation, or economic theory of regulation states that industrial regulation is essential in maintaining a natural monopoly. Natural monopolies turning into a regular monopoly charging monopoly prices can be harmful to society. Something that everyone most generally uses or needs like public resources i.e. electricity and water. Almost every person in our society requires these resources. The initial cost for creating a firm that can provide these services is high. Some startup cost can include power stations as well as power lines, labor costs, the cost of producing the power, and many other costs. These naturally occurring costs can often bar entry or discourage entry into the industry. In the event that a firm does make it into the industry and starts producing these public resources such as

There are two types of regulations: economic and social. An Economic regulation is the prescription of price and output for a specific industry, as Social regulation is the prescription of health, safety, performance, and environmental standards that apply across several industries. Most economic regulations happened after the Great Depression, under the leadership of President Franklin D. Roosevelt, in which a natural monopoly, like utilities, railroads, and communication would match that of a competitive market, thus setting a market-price cap. Understanding that in some aspects the government cannot stop a monopoly without causing market harm in some cases, so they attempt to rectify it. The government gives companies fair rates of returns, which is a price that allows a monopoly firm to earn a normal profit, similar to one gained when a companies marginal cost matches their marginal revenue. This is especially important, because when the government calls for the deregulation of a company, it leaves behind stranded assets, properties that lose values after the intervention. Other ways government can aid in the deregulation of a business is through privatization and contracting out; the government can either enlist a private firm to do a service on their behalf, or even transferring the public enterprise to private

The republican energy policy focuses on less regulation and puts the responsibility of energy independence on American business. The belief is corporations will spend more on drilling, alternate fuels and research and development and do

In 2007, Canada’s industries saved 2.1 billion U.S. dollars of energy costs (2007). All these numbers show Canada’s efforts in general public utilities.

2. Complying with regulations and reporting requirements; the regulatory landscape can be particularly complex for utility companies. Not only do they have to conduct operations in a variety of regulatory and tax regimes but they also have big upfront investment needs, which often go hand in hand with great uncertainty about long-term outcomes.

Deregulation by definition is the removal of regulations or restrictions, especially in a particular industry. In my opinion this is a great thing for not just the government but for consumers as well. Three ways that deregulation helps our economy is by how it drops prices of goods, allows niche businesses to pop up and start making money, and finally how deregulation helps stop the appearance of monopolies.

For instance, Hawaii is being charged for things like renewable energy, and energy efficiency programs. However, a national energy expert Robert Thormeyer, a spokesman for the National Association of Regulatory Utility Commissioners, says it is not as easy to see whether Hawaii’s non-fuel charges are realistic because Hawaii has a unique isolated electric grids (Robert Thormeyer, 2015). It actually only currently cost Hawaiian Electric Company around 13.6 cents per kilowatt hour to generate electricity from its oil, but they charge residents 20-20 cents per kilowatt hour. In addition, a consumer is also paying an additional twelve dollars a month or one hundred forty-four dollars a year because of a program called decoupling. On top of that addition cost, consumers are charged an extra five dollars a month to support Hawaii’s energy efficiency and renewable energy programs. Therefore, consumers are paying addition fees without a choice because Hawaiian Electric Company is the only electric company in

(cite 9) Before deregulation there was, and still is regulation in some areas of business and commerce as it relates to transportation. “Regulation consists of requirements the government imposes on private firms and individuals to achieve government’s purposes. These include better and cheaper goods and, protecting existing firms from unfair competition, and economic regulation that limits who can enter a business”. Litan, R. (2008). Regulation in the transportation industry gained momentum in the 1800s after the civil war. The monopoly created by railroads at that time gave birth to many rail carrier abuses and unfair business practices such as the bribing of elected public officials and showing favoritism to preferred customers. They even went so far as to manipulate the price of stocks and bonds on the market by Stifling or eliminating competition. According to Talley, W.(2001) the regulatory periods can be further broken down into three periods; “the Monopoly Era (1800s), the Competition Era (1930s) and the Reform Era

Renewable energy can be more affordable to people in the U.S. There are many possible ways it can be more affordable. For example, a renewable energy such as electricity can power automobiles with a be less expensive cost than to power it on fuel. Since fuel is related with international market, the price on fuel often result to inflation and deflation (Leistikow n. pag.). According to the chart on Gasoline vs. eGallon prices, Dan Leistikow compares, “Fueling your car with gasoline costs roughly 3 times more than fueling with electricity” (n.

The years since regulation have been rocky for the airline industry. Airline after airline has declared bankruptcy and either ceased existence or emerged as a weaker airline. The surviving airlines have done so by merging and protecting their territory with tactics not even dreamed of in most industries. Robert Crandall said it best when he noted, "This is a nasty, rotten business (Petzinger,1995)." You would think that with the competition allowed by deregulation that a large number of new names would exist, but that does not seem to be the case. Most Americans still travel on American, Delta, United, US Airways, or Continental (Kane, 2003). The only true champion of deregulation is Southwest Airlines, whose success is paving the way for others such as JetBlue, but the obstacles are enormous. Initially, the airlines went after each other by slashing fares and driving competitors out of business. The industry quickly learned that although this tactic was effective, it was not profitable, and it was more economical to focus on controlling the air out of a few cities (hubs) than to attempt to directly compete in every single market. Since most of the major airlines already had key cities in which they controlled most of the takeoff and landing slots, airlines could charge higher fares and take in greater profits without any real head to head

Abstract: An overview of Japan’s energy challenges, short-medium term and medium-long term. An overview of the industry structure and historical business orientation. A search for solutions that covers the potential for dynamic pricing and industry restructuring, with an overview of the political forces at work

For several years now the European Union, the largest regional trading block in the world, has been trying to liberalize its energy market, replacing the markets of its 27 member states with a single continent wide market for electricity and gas. The first phase of liberalization went into effect in June 2007. When fully implemented, the ability of energy producers to sell