From that small beginning, a market in gas and transmission developed. The problem of regulators designing markets can be understood in the context of electromagnetic spectrum markets. The idea that markets are implemented or designed is the same old mentality that gave us planning and regulation in the first place. Stranded Assets To most utility executives and to the regulators listening to them, the major downside of complete deregulation of the electricity market is the issue of stranded assets. Behind every stranded asset stand many stranded customers whose fates are bound with the fate of the asset.
Deregulation releases the captive customers.
If the current state reform models indicate properly, few if any state regulators intend to let the interstate power market compete for their captive customers. If they cannot block it outright, they are likely to load obligations onto interstate suppliers and raise hurdles against their full participation in the market. That view of stranded assets misinterprets the risks that arise from closed rather than open markets. There are no stranded assets or customers in an open market because electricity generation assets are no longer specialized to a particular service or set of customers. In general, specialized assets are illiquid in markets, and lack of liquidity severely affects value.