‘Market Power’ Cited in Run-Up of Energy Prices
From Times Staff and Wire Reports
The biggest reason Californians paid $7 billion more for electricity in the summer of 2000 was the ability of power suppliers to ask for and get high prices, says a new study by university economists.
Severin Borenstein and James Bushnell of the UC Energy Institute and Frank Wolak of Stanford University concluded that 59% of the run-up in power prices was attributable to “market power.”
In analyzing data from June 1998 to October 2000, the economists found that 21% of the increase was due to production costs, such as rising natural gas prices.
