The Reason Foundation, a public policy research organization, has issued a report, Federal Power: The Case For Privatizing Electricity, recommending privatization of the Tennessee Valley Authority...
to realize that retail competition, per se, may not be socially desirable. Only when combined with reforms in pricing, obligation to serve, planning, and other regulatory rules will retail competition enhance the industry's economic performance.
We agree that retail competition in an otherwise unchanged regulatory world can produce adverse results. But such a world would likely be unsustainable, since market pressures would engender the necessary procompetitive reforms in regulatory rules.
Kenneth W. Costello and Robert E. Burns
The National Regulatory Research Institute
Energy Management Associates/EDS
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