Pool prices, contracts and regulation in the British electricity supply industry

<p>The privatisation of utilities was advocated as a policy which would enhance efficiency. Ultimately, these efficiency gains would benefit customers, resulting in lower prices and / or higher-quality outputs. In the electricity supply industry, privatisation was accompanied by a much more explicit attempt to restructure the industry, with the aim of enhancing competitive pressure. The 1980s witnessed a succession of attempts to introduce competition into the electricity industry. The 1983 Energy Act addressed entry conditions, but in practice left the dominant incumbent, the state-owned Central Electricity Generating Board, in a position to manipulate the tariffs to the disadvantage of entrants (Hammond, Helm and Thompson 1986).</p>