Price freezes and gas pass-through: an estimation of the price impact of electricity market restructuring

This article examines the impact of market restructuring on retail prices, using the restructuring of the electricity industry as a case study. Utilizing synthetic control as an estimation strategy, this paper finds retail competition reduced retail prices across all sectors by an average of $1.5/MWh, relative to their counterfactual outcome. On average, prices fell for residential and commercial users and rose for industrial users. The price differential is consistent with the enactment of price ceilings and increased pass-through of changes in the price of natural gas.