Competition in the generation, transmission, and distribution of
electricity is of increasing interest to policy makers as well as
to buyers and sellers of power. The use of competition as a social
policy tool to benefit consumers carries the necessity of
preserving competition when it is threatened by mergers or other
structural changes. The work explains central principles of
antitrust economics and applies them to mergers in the electric
power industry. This work focuses on mergers, but the economic
principles explained here will be useful in analyzing many
important issues flowing from growth of competition in electric
power. For example, proper definition of markets and analysis of
market power will be useful in decisions on whether to continue
regulation.
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