| Summary: | The traditional structure of the electricity sector in the U.S. has been that of large vertically integrated companies with sole responsibility for distributing power to end users within a franchise area. The restructuring of this sector that has occurred in the past 10-20 years has profoundly altered this picture. This dissertation examines three aspects of that restructuring process. First chapter of my dissertation investigates the impacts of divestitures of generation,
an important part of the process of restructuring, on the efficiency of distribution systems. We find that while all divestitures as a group do not significantly affect distribution efficiency, those mandated by state public utility commissions have resulted in large and statistically significant adverse effects on distribution efficiency. Second chapter of my dissertation explores whether independent system operator (ISO) formation in New York has led to operating efficiencies at the
unit and the system level. ISOs oversee the centralized management of the grid and the energy market and are expected to promote more efficient power generation. We test these efficiencies focusing on the generation units in New York ISO region from 1998 to 2004 and find that the NYISO formation has introduced limited efficiencies at the unit and the system level. Restructuring in the electricity industry has spawned a new wave of mergers, both raising questions and providing
opportunities to examine these mergers. Third chapter of my dissertation investigates the drivers of electric utility mergers consummated between 1992 and 2004. My results provide support for disturbance theory of mergers, size hypothesis, and inefficient management hypothesis as drivers of electric utility mergers. I also find that the adjacency of the service territories is the most noteworthy determinant of the pairings between IOUs.
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