ABSTRACT
Chapter 2 questions the validity of the natural monopoly model as applied to electric power, and Chapters 3 and 4 suggest that the electric industry was not in need of a vast system of state and federal regulation because of a market failure problem. The question then is not why there is a national effort today for deregulation (or at least regulatory reform), but why it didn’t happen earlier. Indeed, from the end of World War II through the 1960s, the system went largely unchallenged. According to the prevailing wisdom of the time, electric power was the paradigm natural monopoly and government regulation was needed to curb it. But if that premise was dubious (as it likely was), why did the system remain unquestioned for decades?
