EI Economists publish paper on changing entry conditions in the electric power industry

A paper by EI economists John R. Morris and Jéssica Dutra and Energy Analyst Tristan Snow Cobb is being published in the May 2020 issue of The Electricity Journal.  The paper (“Should market power still be a concern in the U.S. electric power industry?”) examines entry into new generation supply in the United States. It finds that entry into new generation is typically small scale and accomplished by companies with below average market shares. The construction of new generation facilities is also strongly associated with generation retirements. Moreover, construction of new generation meets the likely, sufficiency, and timeliness standards set in the U.S. Horizontal Merger Guidelines.  Actual ongoing entry suggests that there is little ability for sustained market power in electric generation in the U.S.  The paper is available at https://doi.org/10.1016/j.tej.2020.106725.