Winners and Losers in the Transition to a Competitive Electricity Industry: An Empirical Analysis
Robert G. Ethier and Timothy D. Mount
The Energy Journal, 1997, vol. Volume 18, issue Special Issue, 161-186
The objective of this paper is to show how the treatment of strandable assets, constrained by industrial customers' access to distributed generation technology, affects the prices paid by different classes of customers and the corresponding level of electricity sales. Competitive electricity rates are likely to be shaped by the regulatory need to recover strandable costs. The choice of recovery method (i.e., the structure of rates charged to customers) and the size of recovered costs will affect both total sales of electricity and consumer welfare. The availability of new turbine technology will limit the design of effective rate structures by giving industrial customers a credible threat to self-generate. A dynamic model using a complete Generalized Logit demand system coupled with an electricity supply system is used to evaluate the effects of different rate structures. The results show that stranding some assets is the best way to improve the welfare of all classes of customer and simultaneously increase the need for new generating capacity.
JEL-codes: F0 (search for similar items in EconPapers)
References: Add references at CitEc
Citations Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to IAEE members and subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:aen:journl:1997si-a08
Ordering information: This journal article can be ordered from
Access Statistics for this article
More articles in The Energy Journal from International Association for Energy Economics Contact information at EDIRC.
Bibliographic data for series maintained by David Williams ().