A test of vertical economies for non-vertically integrated firms: The case of rural electric cooperatives

Monica L. Greer

Energy Economics, 2008, vol. 30, issue 3, pages 679-687

Abstract: This paper seeks to evaluate unrealized economies of vertical integration for rural electric cooperatives. Given the well-established network economies that are inherent in the generation, transmission, and distribution of electricity, the coops long-standing choice of market structure is questionable (especially if their strategy is welfare maximization). Organized as either generation-and-transmission or distribution-only, the traditional measures of vertical economies will not work. Thus, I have devised an alternative method by which to measure such economies and find that, on average, cost savings in excess of 39% could have been realized had the coops adopted a vertically integrated structure.

Downloads: (external link)
http://www.sciencedi ... 601ebc6d4b088511b5ad
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Access Statistics for this article

Energy Economics is edited by R. S. J. Tol and J. P. Weyant

More articles in Energy Economics from Elsevier
Series data maintained by Heidi Boesdal ().