The Efficient Design of Contracts To Purchase Cogenerated Powers
Edward C Hall and
John E. Parsons
The Energy Journal, 1990, vol. Volume 11, issue Number 2, 105-116
This paper analyzes long-term power purchase contracts between an electric utility and a cogenerating facility and suggests ways to improve them. It discusses the best way to construct the contract payment structure in light of the given avoided cost structure; analyzing in detail the harmful incentives to low maintenance and how to avoid them. The paper concludes that the method it describes can be used to aid in the better design of contract provisions that will remedy the problem of incentives to low maintenance.
JEL-codes: F0 (search for similar items in EconPapers)
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