In PWP-026, Kahn, Outhred, and Bushnell review the implications of network related issues for implementing a competitive bulk electricity market. Given the enormous changes anticipated in the US electricity system as a result of increasing competitive pressure, there has been a corresponding growth in the analysis and discussion of structural change in the electricity industry. Much of this literature is normative in nature. Much of it draws upon lessons from the experience of other countries in restructuring the electricity industry along more competitive lines. PWP-026 starts with the current situation in the Western U.S., reviews near time changes, and identifies policy choices that will influence structural change.
The authors focus much more narrowly on the constraints associated with the current institutional structure than the normative studies. They adopt the point of view that structural change in the US is difficult compared to the experience in other countries because we start from a position of substantial private ownership. In the countries where major structural change in the electricity industry has occured, the initial position was public ownership. This has made changes much easier to implement.