When Does Regulation Distort Costs? Lessons from Fuel Procurement in US Electricity Generation: Reply

S-Tier
Journal: American Economic Review
Year: 2021
Volume: 111
Issue: 4
Pages: 1373-81

Authors (1)

Steve Cicala (not in RePEc)

Score contribution per author:

8.043 = (α=2.01 / 1 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

The average effect of deregulatory policies on fuel prices at coal-fired power plants is strongly influenced by plants that were initially paying the highest prices for fuel. Primary sources document that these plants were locked into long-term, high-cost fuel contracts, and only secured market rates post-deregulation. While these plants' fuel costs were unusual, their response to deregulation was not: both coal- and gas-fired plants reduce fuel prices one-for-one with the amount they were initially paying above their neighbors' costs. Our understanding of deregulation is not improved by excluding those who stand to benefit most.

Technical Details

RePEc Handle
repec:aea:aecrev:v:111:y:2021:i:4:p:1373-81
Journal Field
General
Author Count
1
Added to Database
2026-01-25