Abstract The natural progression of generators and retailers, following electricity deregulation, to vertically integrate is a contentious subject involving, at one extreme, expectations that a laissez- faire market approach will deliver economic benefits to all participants, and at the other extreme, suspicions that the unusual features of the electricity sector, in providing generators with market power, may not provide electricity consumers with an improved outcome. The objectives of this thesis were to: understand fully the drivers of generators and retailers to vertically integrate and to apply this knowledge to the Queensland electricity market to determine the financial impact on generators, retailers and consumers from vertical integration (VI). A literature review was undertaken of VI in a generic sense, noting the distinction between market contracting and ‘internalisation’, with particular reference to the writings of Oliver Williamson. The Federal Court case involving Australia’s largest electricity retailer, Australian Gas and Light Ltd, seeking approval to purchase a minority shareholding in the Victorian generator Loy Yang Power, was closely examined from the perspectives of theoretical and practical electricity sector VI integration issues. A quantitative analysis was undertaken of an assumed 60% VI of the Queensland electricity market to assess the costs and benefits to generators that vertically integrated and to consumers. The quantified generator benefits included margin elimination, savings in overheads, more rapid decision-making, and demand side management (DSM) savings in deferred capital expenditure on peaking generation and network expenditure through reduced peak demand. To support the quantitative analysis, two scenario models were developed. The first model replicates the process by which generators build up revenue certainty over time from hedge contract sales and bidding of output into the electricity grid. How generator bidding behaviour is affected by the level of hedge cover and hedge contract prices is examined, particularly in regard to how this behavior is affected by the competitive relationship between retailers and generators. The second scenario model replicates the attitude of vertically integrated generators (VIGs) towards offering DSM services by observing how the attitude of individual VIGs is affected by level of peaking generation and by the generation-to-retailing output proportion. It was determined that a combination of these features and particular market scenarios could result in some VIGs being financially worse off by providing DSM services, an important conclusion in the context of the increased community focus on energy conservation. The extent to which VIGs pass on VI and DSM benefits to consumers was calculated under scenarios of weak and strong retail competition. Of most relevance was the difference in market behaviour between retailers that had became vertically integrated, and those that had not, with the latter expected to become less competitive in both the wholesale and retail markets. This outcome was observed to provide generators with additional market power potential, a subject closely examined. The quantitative analysis of the Queensland market concluded that the maximum possible benefit that consumers could expect from VI was $138 million per annum with current DSM technology and strong retail competition, increasing to $156 million per annum if DSM technology improved, for example in regard to more cost-efficient meters. Total possible benefits to VIGs and consumers was estimated at $321 million per annum, so that consumers could expect to receive no more than 50% of total expected benefits from VI. This conclusion is not surprising because generators will only seek to be vertically integrated if they perceive clearly identified benefits from VI. The reasons why consumers are unlikely to receive benefits greater than this are: • $30 million per annum of internal savings being retained by VIGs; • VIGs achieving a minimum $60 million per annum additional revenue benefits through wholesale and retail price increases, arising from their stronger generation and retail positions; and • $75 million per annum of potential DSM benefits not being offered to consumers, because of the reluctance of VIGs to provide DSM services where the outcome could be reduced export revenue, reduced sales revenue and lower pool prices. In summary, using the Queensland market as a case study, in a strongly competitive retail market consumers could expect to receive, at the most, 50% of VI and DSM benefits. However in a weakly competitive retail market, where VIGs retain most of the benefits and are able to achieve higher wholesale prices, the outcome could instead be an overall cost to consumers. The thesis concludes with a brief discussion of policy implications and approaches to addressing key issues arising from increasing VI in deregulated electricity markets.

Thesis (Ph.D)--Aerospace Engineering, Georgia Institute of Technology, 2009. / Committee Chair: Dimitri Mavris; Committee Member: Daniel Schrage; Committee Member: Hojong Baik; Committee Member: Jung-Ho Lewe; Committee Member: Kurt Neitzke. Part of the SMARTech Electronic Thesis and Dissertation Collection.

Thesis (Ph. D.)--Indiana University of Pennsylvania. / Includes bibliographical references.

Thesis (Ph. D.)--Columbia University, 1988. / Includes bibliographical references (leaves 345-369).

This thesis examines the liberalisation of the European Community's civil aviation industry and attempts to measure how effective this process has been in achieving its goal of increased competition and greater efficiency. Using the experience in the United States following deregulation of domestic air transport services as a template, the study employs Easton's model of political analysis and Porter's model of competitive forces as a framework for empirical research. This research was carried out with a representative sample of EC airlines, of their suppliers and customers, of providers of substitute services and of the industry's regulators. The results of the research were validated by personal interviews with leading stakeholders in the industry. The main Conclusions drawn from the research are that: i. liberalisation of the European Community air transport market has resulted in an influx of new entrants, an increase in the number of routes operated and a wider availability of discounted fares; ii. to the extent that competition has nevertheless been less fierce than anticipated, this is because the aims of liberalisation have been frustrated by a resistance to change on the part of certain Member States and by the European Commission's inability to prevent further grants of State aid to loss-making flag carriers. Inadequate infrastructure has also acted as a brake on competition; iii. customer choice is strongly influenced by frequency of service and by price. Those airlines which have set out to gain market share and which have pursued low price strategies have benefited most from liberalisation; iv. airlines benefit from selling to a large number of buyers and from having a wide choice of suppliers; V. the only threat of substitution to air travel within the European Community is from the High Speed Train and then only over comparatively short distances.

The deregulating electricity industry is a capital intensive and political sensitive industry (Pretorius, 1998:3). All the deregulation and privatisation incentives are, and continue to be hotly discussed topics by various stakeholders across the world. At the same time, the auditing profession has been the subject of scrutiny specifically after several corporate failures that noticeably include Enron Corporation, one of the world’s largest companies that operated in the deregulated electricity industry in the United States of America (hereafter referred to as the USA). As a result, the auditing profession has been reviewing many audit procedures and core aspects of the profession that has remained contentious issues over a number of years. This study is focussed at the definition and application of engagement risk within the auditing profession and aims to identify those factors present in the current deregulating electricity industry in South Africa that should be considered in the evaluation of engagement risk by the independent auditor. An error in the evaluation of engagement risk of a client can be, and is most likely to be a costly error. Settlement of legal claims may be very costly both in monetary terms and in damage to a firm’s reputation (Odendaal, 2002). Although most claims are successfully defended, the cost of defence is typically very high, including legal costs and the time of senior professionals. Odendaal (2002) refers to “the international liability crisis” as a rise in legal litigation and competition amongst auditing firms have lead auditors to progressively place greater reliance on the client acceptance stage as the first step in their risk control programme. This study continues to focus on engagement risk, specifically within the deregulating electricity industry in South Africa, an industry that is undergoing rapid change. The South African electricity supply industry is currently in the midst of a transition from a vertically integrated and regulated monopoly to an entity that will operated in a competitive market where retail customers will choose the suppliers of their electricity (South Africa, 2000). The old school of thought that considered electric utility power generation, transmission, and distribution a “natural monopoly” has given way to a new school of thought. There is a widespread view among legislators, regulators, industry analysts, and economists that the Electricity Supply Industry (hereafter referred to as the ESI) and Electricity Distribution Industry (hereafter referred to as the EDI) would be more efficient and economical in a competitive market (Energy Information Administration, 2000). The objective is the consolidation of the EDI into Regional Electricity Distributors (hereafter referred to as REDs), created from the distribution assets and operations owned by municipal local governments (Municipalities) and Eskom (Yelland, 2002). From a generation perspective, Eskom is expected to run out of excess generating power in 2006 (Eskom, 2003:57). This means that independent power producers (hereafter referred to as IPPs) are likely to be licensed in the next two years in order to meet South Africa's future electricity requirements. Eskom’s Transmission Group is likely to be the Independent System Operator (hereafter referred to as ISO), a not for profit state owned entity which effectively would manage the Southern African energy market, buying from Eskom and other electricity generators and selling to REDs and neighbouring countries at prices determined by a market pricing mechanism (NER, 2001). As a competitive market for electricity trading has not yet been established in southern Africa, a number of foreign electricity markets have been studied by entities such as the National Energy Regulator (hereafter referred to as the NER) in order to research best practice in formulating a draft energy-trading model for South Africa (NER, 2001). Accordingly this study also focuses on providing the auditor with and understanding of the current and future structure of the electricity industry as well as the regulatory framework and suggested developments. / Mr. A. van der Watt

Bibliography: pages. 63-66. / This research consists of a wide literature review on deregulation and privatisation of airline business world wide. The emphasis is on the benefits of airline privatisation. The idea was to attempt to find out whether the deregulation of South African Airways (SAA) indeed brought about the changes that are expected of a commercial concern. These changes included cost cutting strategies and charging economically efficient fares as well as abandoning unprofitable routes. Some personal contact with the SAA Public Relations Officers in Cape Town and Johannesburg was used to gather the data used in the research. The Transnet and the Competition Board annual reports were other major sources of data. The analysis was accomplished by scrutinising the SAA financial statements as to whether SAA followed all the requirements implemented when deregulation was introduced. An econometric test was used to check whether there was any improvement in capacity utilisation at SAA as was expected to happen after deregulation. The findings from this research are that SAA did introduce new measures to try to be profitable and cut costs, such as, reducing the labour force and abandoning unprofitable routes. SAA also stopped cross-subsidisation practise, whereby loss making routes were financed by profitable ones. In general SAA introduced measures that can be expected from a profit maximising firm which is under pressure to tum profits. However, these changes have not yet produced consistent results as far as profit is concerned and is supported by the econometrics test which does not support the expected hypothesis that since SAA is now operated on commercial basis, should be able to tum profits and be efficient.

In 2006, the German federal government relinquished its power to determine store opening hours to the 16 federal states. Since then, substantial deregulation of shopping hours has occurred in all states except Bavaria and Saarland. Such deregulation could support economic growth, but it has been argued to hurt small businesses. Therefore, this thesis examines different store size categories to find possible effects of deregulation in Germany. Past studies have focused on the employment effects of deregulation, whereas this investigation employs a difference-in-difference approach with OLS regression on the number of stores in each size category. States that have extended store opening hours will be compared to those that have not. Theory predicts large stores to be more able to profit from efficiency gains and higher returns on investment due to extended hours. The results did not support the theoretical framework. Instead, the data indicate no significant effects on the number of stores and suggest that the constraints are not binding. Small businesses do not appear to have been affected by the change. If deregulation can be found to increase consumer spending and welfare, then such a policy change can have positive economic impacts. Further research should be aimed in this direction.

No description available.

Note: