A new analysis shows that people pay 35 percent more for electricity in states that abandoned traditional regulation of monopoly utilities in the 1990s compared with states that stuck with it. That gap is almost certainly going to widen in the coming decade.

Residential customers in the 15 states that embraced wholesale markets paid on average 12.7 cents per kilowatt-hour last year versus 9.4 cents in states with traditional regulation.

Now 3.3 cents extra may not seem like much until you consider the volume of power people consume. Last year American residential customers paid for 1.4 trillion kilowatt hours of electricity.

You might think that the higher prices in the 15 states with markets would encourage investment, creating an abundance of new power plants. That, at any rate, is what right-wing Chicago School economic theories on which the electricity markets were created say should happen. The validity of these theories, and flaws in how they were implemented, matter right now because Congress is considering a raft of energy supply bills that include some expansion of the market pricing of wholesale electricity.

The theory that markets produce the best prices is generally true. The electricity markets are based on a single price, known as the clearing price, for all electricity sold at auction. The idea is that high prices will signal investors to build more power plants, bringing down future prices.

Yet just 2.4 percent of new electric generating capacity in 2013 “was built for sale into a market,” electricity-market analyst Elise Caplan showed in a study last fall fittingly titled “Power Plants Are Not Built on Spec.” The rest were built in states with traditional regulation or under long-term supply contracts that essentially guaranteed repayment of loans to build the plants.

Here’s another measure of failure: Areas covered by electricity markets have 60 percent of America's generating capacity, but enjoyed just 6 percent of new generation built in 2013.

If unregulated markets are invariably better, as the Chicago School holds, why was 94 percent of new generating capacity built in traditionally regulated jurisdictions? Don't owners and executives detest regulation? Why isn’t regulation hobbling investment?

One answer is that Wall Street prefers stability to volatility. Why would investors make risky bets when they could put their money into virtually guaranteed returns in those states that rely on traditional regulation of electricity prices?

In both the United States and the United Kingdom the adoption of market pricing has “failed to produce the expected lower prices to consumers,” professor Richard E. Schular of Cornell and Leonard S. Hyman of Energy Resource Capital said in a paper delivered last year.