On Distributive Effects of Optimal Regulation for Power Grid Expansion

Juan Rosellon and Luis Herrera

No DTE 563, Working Papers from CIDE, División de Economía

Abstract: To date, the distributive implications of incentive regulation on electricity transmission networks have not been explicitly studied in the literature. More specifically, the parameters that a regulator might use to achieve distributive efficiency under price-cap regulation have not yet been identified. To discern these parameters is the motivation for the research presented in this paper. We study how different weight parameters affect the distributive characteristics of optimal price-cap incentive regulation for electricity transmission. We find that a regulator's use of ideal (Laspeyres) weights tends to be more beneficial for the Transco (consumers) than for consumers (the Transco).

Keywords: Electricity transmission; incentive regulation; distributive efficiency (search for similar items in EconPapers)
JEL-codes: L50 L51 L94 Q40 Q42 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2013-11
New Economics Papers: this item is included in nep-ene, nep-reg and nep-res
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http://www.economiamexicana.cide.edu/RePEc/emc/pdf/DTE/DTE563.pdf (application/pdf)

Related works:
Journal Article: On distributive effects of optimal regulation for power grid expansion (2014)
Working Paper: On Distributive Effects of Optimal Regulation for Power Grid Expansion (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:emc:wpaper:dte563

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