When policymakers deregulated the electricity industry, they made four mistakes that have had lasting consequences:
1. Focusing on market structure and operating savings instead of increasing capital expenditures and climate change.
2. Ignoring the cost of capital, which has increased due to competition and broken-up companies.
3. Ignoring transaction costs, the importance of contracts, and non-economic incentives, leading to gaming of the system.
4. Assuming that light-handed regulators could effectively oversee a complex industry, resulting in excess profits and higher consumer costs.