Study: Deregulated Power Markets Decrease Cost of Generation

Study: Deregulated Power Markets Decrease Cost of Generation

Jan 23, 2017

by Margarita Fournier; Copyright 2016 by Competitive Assets, LLC.  All rights reserved

On 1/20/17, FuelFix reported on a study by the Energy Policy Institute of the University of Chicago (EPIC), which found that deregulated utility markets decrease the cost of generating electricity by $3 billion per year. “Power companies in deregulated markets are more likely to use lower-cost power generating units, and reduce the use of power generators that cost more to run, the University of Chicago study found. The study’s conclusions are based on simulated data pooled from daily electricity operating reports from nearly every electricity-generating site in the country from 1999 to 2012. The deregulated market has its critics, however, who say that customers can be overwhelmed by the choices for power and often don’t choose lower-cost power plans. The University of Chicago study says that deregulated markets are not perfect, but the benefits – saving billions a year – outweigh the system’s disadvantages.” EPIC’s press release states that the “study finds that regions using a market approach to buy and trade electricity save about $3 billion a year because of the increased efficiencies and coordination the markets bring.”

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Posted by CompetitiveAssets on January 23rd, 2017

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