Motivations for market restructuring: Evidence from US electricity deregulation

The purpose of this paper is to examine whether electricity restructuring was brought about due to the Public Interest Theory (that regulatory changes are undertaken to benefit society) or the Interest Group Theory (that groups hoping to gain from deregulation lobby for regulatory changes). From 1996 to 2002 eighteen states developed restructuring programs targeted at improving efficiency through the use of increased wholesale trading, abolition of 'cost of service' regulation, measures to open electricity production to non-utility entities, and the unbundling of transmission and distribution. Results indicate some evidence of the Public Interest Theory and strong evidence of the Interest Group Theory. (C) 2016 Elsevier B.V. All rights reserved.