Efficient Retail Pricing in Electricity and Natural Gas Markets

Steven L Puller and Jeremy West

Santa Cruz Department of Economics, Working Paper Series from Department of Economics, UC Santa Cruz

Abstract: A long line of research investigates whether the retail prices of electricity and natural gas send proper signals about scarcity in order to induce efficient consumption. Historically, regulated utilities have not designed tariffs that set marginal prices equal to marginal costs. Currently, some jurisdictions are opening the retail sectors to competition via “retail choice.” These new regimes replace imperfect regulation with imperfect competition as the process by which retail tariffs are formed. We discuss the challenges in evaluating the efficiency of tariffs and present evidence of how pricing has changed in markets with retail choice.

Keywords: Economics; Applied Economics; Commerce; Management; Tourism and Services; Commerce; management; tourism and services (search for similar items in EconPapers)
Date: 2013-05-01
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Journal Article: Efficient Retail Pricing in Electricity and Natural Gas Markets (2013)
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