Antitrust is not another form of regulation. Antitrust
is an alternative to regulation
and, where feasible, a better alternative.
(em Stephen G. Breyer,
"Antitrust, Deregulation, and the Newly Liberated Marketplace,"
75 Calif. Law Rev. 1005, 1007 (1987).
As the electric power industry moves toward deregulation and a regime of competition, a giant regulatory inquest has begun, invoking antitrust principles to avoid allowing any anticompetitive concentration of ownership and control. The competition that is contemplated for the electric power industry is, of course, in the market for electric generation.
But what has not been much addressed is the crucial circumstance that electric generation has never before operated in a competitive environment.1 We know little about the "natural" structure of the industry. And little of the discussion has looked to experience in other regulated industries that have been deregulated and where there is abundant evidence of the kind of structural change that typically follows upon deregulation.2
What needs to be borne in mind about the process of deregulation is that it provides a whole new environment calling urgently for structural change. One commentator discussing an entirely different, but formerly regulated, industry, has noted that "mergers are nearly inevitable in the deregulated environment. ... To the extent that mergers yield more efficient operations (em or shield [companies] from ... ruinous rivalry (em mergers will be encouraged by the threats to survival."3