ABSTRACT
During the twentieth century, the privately-owned electric utility was regulated as a natural monopoly. According to the natural monopoly paradigm, a vertically-integrated electric utility provided generation, transmission, and distribution service to all customers within a geographic service territory. While the firm was allowed to operate as a monopolist, it also had certain responsibilities: it submitted to price regulation and assumed obligations to extend service to all customers within its geographic service territory and to continue providing service, once service had commenced (Haar & Fessler, 1986).
