Retail electricity price evolution in California and the UK: A comparative analysis

Abstract

[EN] Since the nineties, the electricity supply industry of many countries has been moving from a vertical integrated natural monopoly status quo to an as-much-as-possible free market. That movement would be reflected in the retail electricity price. In the traditional cost of service structure of the electric power sector the costs were simply allocated to generation, transmission and distribution. After the liberalization, some activities were split up and new institutions were created. The electricity systems of the UK and California have been operating in very different environments including political framework, energy resources, and economic structure. To evaluate the overall results, in this paper we analyze the evolution of the real average final price, in PPP units, of electricity in the UK and California over the last three decades.