Abstract
The changing policies of federal environmental regulators are causing many unexpected developments in the utilities markets. The impacts of various actions, such as deregulation, service unbundling, and increased reliance on competition, are examined. The Clean Air Act Amendments of 1990 allowed for the application of economic incentive-based strategies for controlling environmental issues. Strategies that enable state regulators to derive maximum benefit from natural gas and emission allowance markets are described. The impacts of actions, such as preapproving contract portfolios, on overall quality of service and environmental health are assessed.