for open competition among electric power producers. Although once believed to be an impossible proposal, competition among electric power producers is a reality in a few areas, such as Massachusetts. The attempt at regulating price in the electric industry is a troublesome one. The objective is not only to minimize the cost to consumers, but also to create a rate structure that will entice the electric company to remain in the industry. The regulatory commission wants the electric company to have a reason to innovate so that they will be able to provide cheaper power in the future. However, if the commission captures all gains from innovation in the form of lower prices, then the electric company has no incentive to take on any type of innovation. Therefore, a compromise must be reached which would provide sufficient incentives for firms to carry out cost-reducing actions while at the same time ensuring that the price for consumers is not too high.
             Each factor of an industry must be regulated for producers and consumers to truly benefit. The control of price does not mean setting one fixed price, but deals with the creation of a price structure for purchasing electricity during peak and non-peak times. The control of quantity refers to the government's attempt to control the amount of electricity produced. For example, in the electric industry, it does not make sense to have a lot of small power
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