Measuring Effects of Competition on Retail Power Charges in Public Procurement Bidding

Author Name TAKAGI Shingo  (Hokkaido University) /HOSOE Nobuhiro  (National Graduate Institute for Policy Studies)
Creation Date/NO. February 2008 08-J-004
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Deregulation in the electric power industry has been aimed at promoting competition, thereby enhancing the industry's efficiency. We use public bidding data from procurements of electric power supply service to study the impact of the reform on the retail supply sector in Japan. We quantify this impact by measuring a decline in power charges controlling the endogeneity bias due to service providers' decisions on whether or not to bid. Our results suggest that power charges are likely to decline by about 0.46 yen/kWh on average when two or more providers bid.