NCPA - National Center for Policy Analysis

Even Enron's Demise Hasn't Sidetracked Power Deregulation

December 6, 2001

While the collapse of Enron Corp. has muted enthusiasm for electric power deregulation among some in the United States, many other countries are moving ahead with plans to free up their energy markets and introduce more competition among suppliers.

  • These efforts are transforming what were once tightly regulated, state-owned industries in Europe and in such developing countries as Brazil, the Philippines and China.
  • Energy specialists say governments in Southeast Asia, Latin America and Africa are trying to solve their energy-supply problems by attracting foreign investors.
  • The European Union is currently discussing opening the electric power market for business users by 2003, natural gas for business users by 2004, and gas and electricity for consumers by 2005.
  • In Brazil, where 80 percent of power-generating capacity remains with state-owned companies, a government panel is seeking ways to dismantle regulatory barriers so as to encourage private investment in new power plants.

To be sure, Enron's fate is being cited by critics of deregulation. But free-market advocates counter such arguments by pointing out the undoubted advantages of privatization and deregulation.

Source: Anita Raghavan, Miriam Jordan and Bhushan Bahree, "World Moves Forward on Plans for Free-Market Energy," Wall Street Journal, December 6, 2001.

For WSJ text


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