The Performance of the U.S. Market for Independent Electricity Generation

G. Alan Comnes, Edward P. Kahn and Tim N. Belden

The Energy Journal, 1996, vol. Volume17, issue Number 3, 23-39

Abstract: We examine recent evidence on the economic performance of the U.S. independent electricity generation market. A sample of power purchase contracts for 26 independent power facilities is used as the basis of this assessment. The contracts were executed in various years between 1987-94. We describe qualitative features of the contracts, including dispatchability and allocation of fuel price risk. We standardize the price formulas of the contract sample and conduct a simple statistical analysis. Because of residual price variation and an indication that buyer willingness-to-pay is highly correlated with price, we conclude that bulk power sold by independent power producers is a heterogeneous product, and evidence for competition in market prices is weak.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 1996
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