ABSTRACT
The electric power industry is one of the most visible industries in the economy. The electric power industry is composed of three primary sectors: generation, transmission, and distribution. Most of the electricity in the Unites States was supplied by investor-owned utilities that performed all three functions—generation, transmission and distribution—within a single enterprise. Once they are identified, the allowable costs are spread among the utility customers in the costal-location and rate-design phase of the cost-of-service proceeding. As deregulation has begun to take shape in electric markets, new institutions have developed to address the concerns and ensure that competition will, in fact, emerge in these markets. The transition to competitive wholesale markets has varied from one region of the country to another. To a significant extent, these differences stem from the structure of the regional electricity markets prior to the transition. There are a number of common features across the various restructured electricity markets in the United States.
