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Funding for Universal Service Obligations in Electricity Sector: the case of green power development

Pascal Favard (), François Mirabel and Jean-Christophe Poudou ()

Cahiers du CREDEN (CREDEN Working Papers) from CREDEN (Centre de Recherche en Economie et Droit de l'Energie), Faculty of Economics, University of Montpellier 1

Abstract: The process of deregulation in network industries, in particular in the electric sector, raises the problem of Þnancing the Universal Service Obligations (USO) corresponding to the production, transport and distribution operations. In this paper, we study three ways of funding for an USO of production, especially the "green" electricity development: the Þnancing with cross-subsidies, the implementation of a fund (financing by a tax) and finally a voluntary funding system by direct subscriptions of consumers. We notably show that this last one Pareto dominates mostly, from a welfare point of view, the other scenarios.

Keywords: ELECTRICITY; ENVIRONMENT; REGULATION; NETWORK; UNIVERSAL SERVICE, (search for similar items in EconPapers)
JEL-codes: D4 L5 L94 Q4 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2002
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