Date Added: Sep 2010
This paper studies the impact of divestiture on the efficiency and costs of electric utilities. The empirical literature shows that there exist economies of scope for electric utilities and that divestiture decreases distribution efficiency but increases generation efficiency. This paper is to bring together these different results. This analysis covers distribution, transmission, and power sourcing. The data is an unbalanced panel of about 138 US electric utilities for the years 1994 to 2006 over which the authors observe 30 divestitures between 1997 and 2003.