Electricity Transmission Pricing Principles

M. Soledad Arellano and Pablo Serra

No 323, Econometric Society 2004 Latin American Meetings from Econometric Society

Abstract: This article lays down economic principles that should govern electricity transmission pricing when peak-load pricing is used to set tariffs. Transmission systems perform three different functions: to transport energy, to substitute for generation capacity, and to increase competition in the system. It is shown that the generating companies should absorb long-run marginal costs so that the proper investment signals are given, whereas fixed costs should be borne by the transmission beneficiaries. In this paper it is shown that the latter differ depending on the function performed by the transmission system

Keywords: electricity transmission pricing; peak-load pricing (search for similar items in EconPapers)
JEL-codes: L51 L94 (search for similar items in EconPapers)
Date: 2004-08-11
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Persistent link: https://EconPapers.repec.org/RePEc:ecm:latm04:323

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