The British privatization experiment, 5 years later: the winners and the losers

Five years ago, the electric power industry sector in England and Wales was privatized and restructured in a sudden and dramatic way. The largest customers (greater than 1 MW) were first to get a choice of who they buy their electricity from, followed in 1994 by the medium sized customers. In 1998, the remaining 22 million small customers will get the same option. The question on many people`s minds is: how well has the experiment worked so far and what lessons, both good and bad, may be drawn from it. More significantly, who have been the prime beneficiaries of the market liberalization and who have been the losers. Has competition produced the benefits that were expected, and if not, why. This report, which is a compilation of four complementary papers by British experts, provides some of the answers to these commonly asked questions.