The Efficient Design of Contracts To Purchase Cogenerated Power*

Edward C. Hall and John E. Parsons

The Energy Journal, 1990, vol. 11, issue 2, 105-117

Abstract: 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.

Keywords: Electric utilities; Cogeneration; Power purchase contracts (search for similar items in EconPapers)
Date: 1990
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Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:11:y:1990:i:2:p:105-117

DOI: 10.5547/ISSN0195-6574-EJ-Vol11-No2-6

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