Forecasting The Effects Of Electric Utility Deregulation: A Hypothetical Scenario For New Jersey

FORECASTING THE EFFECTS OF ELECTRIC UTILITY DEREGULATION: A HYPOTHETICAL SCENARIO FOR NEW JERSEY By: Frederick Treyz and Lisa Petraglia Simulates the effect of 10% decline in commercial and industrial electric rates to illustrate a hypothetical component of deregulation in the state of New Jersey...would increase gross regional product by $211 million in the first year and $577 million in the tenth year ... employment would increase by over four thousand people in the first year of simulation. The latest wave of deregulation is transforming the structure of the electricity industry from a patchwork of monopolies to an open system of competitive firms. This change is being led by policy makers who believe that deregulation will result in lower electric rates, and more efficient production and distribution of electric power. These direct changes are tied into broader economic benefits resulting from higher real incomes and increased business competitiveness. In this article, we describe how a regional economic forecasting and policy analysis model is used to quantify the effects of electric utility deregulation on a regional economy. THE REMI MODEL The analysis is conducted using ...