Does public ownership provide affordable and reliable electricity to household customers? : case studies of electricity sector reforms in the UK, France, Germany and Italy

Abstract

Over the last three decades, in order to solve issues related to economic efficiency and under-investment, many European countries have opted for the liberalization of the electricity sector. This was generally coupled with a progressive breakup and privatization of vertically integrated national monopolies. This chapter seeks to assess whether these reforms have generated welfare benefits for household consumers within the European Union. After reviews of national reforms, we investigate the relationship between public ownership of electricity companies and measurements of affordability and reliability of service. The pattern of these measurements through time is analysed across four countries: France, Germany, Italy and the United Kingdom, all of which have pursued different pathways in restructuring their electricity sectors. Our study shows that privatisation and liberalisation have not had a consistently positive impact on household customers. Even though the data suggest that consumer welfare may have improved in the beginning of the millennium, subsequent developments cast doubts that ownership transfers from public to private entities are causally linked to such improvements.