The Politics of Electricity Restructuring across the American States: Power Failure and Policy Failure

Abstract

While the broad purpose of this research is to provide an improved understanding of general state policy innovation, we develop and test a model of policy innovation which examines the factors that influence the probability of a state restructuring its electric utility policies. The results of our model of electric restructuring generally support our hypotheses and more broadly the literature regarding policy innovation. Our findings indicate economic interests continue to represent a key factor in understanding the policy choices of state legislatures. States which faced high energy costs were most likely to look for opportunities to reduce those costs. Second, we find state legislatures with the greatest resources and expertise were quickest to explore and adopt policy innovations in response to their high energy costs. Third, states where the general policy preferences of those in power favored deregulation (Republicans) were also more likely to restructure. Finally, we note it is interesting that a policy innovation which many believe to have failed so miserably was most likely to be adopted by the most professional (sophisticated) legislatures.