Authored by Brennan, Timothy J. ; Palmer, Karen L. ; Kopp, Raymond J. ; Krupnick, Alan J. ; Stagliano, Vito ; Burtraw, Dallas

• 1. Introduction: Why Care about Restructuring the Electricity Industry? The Coming of Competition to the Electricity Industry Policy Initiatives Shaping Regulatory Reform The Six Major Issues The Goal 2. The Electricity Industry and Its Regulatory History Functions of the Electricity Industry Composition of the Electricity Industry A Century of Electricity Policy Conclusion 3. Implementing Competition: Different Levels, Different Models Forces for Competition The Scope of Competition Two Proposed Market Structures 4. Market Power in Delivering Power: Regulating Electricity Transmission Premises for Regulating Transmission Whether to Regulate Transmission How to Regulate Transmission Special Features of the Transmission Industry Conclusion 5.Restructuring Electric Utilities: The Pros and Cons of Vertical Integration Pros and Cons of Vertical Integration Vertical Integration Where Markets Are Not Competitive Vertical Integration under Regulation Key Restructuring Questions Conclusion 6. Paying for the Past before Entering the Future: Coping with Stranded Costs Stranded Costs throughout the Economy Economic Principles of Regulation: How Big Could the Stranded Costs Be? Economics of Contracts: What Was the Regulatory Compact wiht Electric Utilities? Recovering the Costs: Practical Proposals for Handling Stranded Costs Conclusion 7. Implications of Restructuring for Environmental Protection Dealing with Air Pollution How Restructuring could Affect the Environment Restructuring and Environmental Policies New Policies to Address the Environmental Consequences of Restructuring Conclusion Epilogue Merger Policy Entry into Telecommunications Markets Electricity Research and Development Social Programs Utility Tax Policy