Coupal, Roger H.

July, 2002

By: Coupal, Roger H.; Holland, David W.
Electric power markets are being deregulated nationwide with different impacts depending upon current policies and historical circumstances from region to region. The Pacific Northwest, with its historic abundance of low-cost hydropower and dependence on public power, with experience deregulation and conditioned by this legacy. This analysis focuses on the economic impacts of deregulation on the State of Washington. A 31-sector computable general equilibrium model is used to evaluate the impacts of Washington's economy. In a most likely scenario, electricity exports expand to high-priced regions. The impact on the state economy is a reduction in gross state product as a result of high electricity prices. Returns to capital increase, but returns to private capital and to labor decrease because much of the financial gain accrues to public power.