An Economic and Legal Perspective on Electric Utility Transition Costs PDF Download
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Author: Kenneth Rose (Ph. D.)
Publisher:
ISBN:
Category : Electric utilities
Languages : en
Pages : 126
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Book Description
Author: Kenneth Rose (Ph. D.)
Publisher:
ISBN:
Category : Electric utilities
Languages : en
Pages : 126
Get Book Here
Book Description
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 119
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Book Description
The issue of possibly unrecoverable cost incurred by a utility, or 'stranded costs, ' has emerged as a major obstacle to developing a competitive generation market. Stranded or transition costs are defined as costs incurred by a utility to serve its customers that were being recovered in rates but are no longer due to availability of lower-priced alternative suppliers. The idea of 'stranded cost, ' and more importantly arguments for its recovery, is a concept with little basis in economic theory, legal precedence, or precedence in other deregulated industries. The main argument recovery is that the ''regulatory compact'' requires it. This is based on the misconception that the regulator compact is simply: the utility incurs costs on behalf of its customers because of the ''obligation to serve'' so, therefore, customers are obligated to pay. This is a mischaracterization of what the compact was and how it developed. Another argument is that recovery is required for economic efficiency. This presumes, however, a very narrow definition of efficiency based on preventing ''uneconomic'' bypass of the utility and that utilities minimize costs. A broader definition of efficiency and the likelihood of cost inefficiencies in the industry suggest that the cost imposed on customers from inhibiting competition could exceed the gains from preventing uneconomic bypass. Both these issues are examined in this paper.
Author: Kenneth Rose
Publisher:
ISBN:
Category :
Languages : en
Pages : 106
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Book Description
Author: Kenneth Rose
Publisher:
ISBN:
Category :
Languages : en
Pages : 106
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Book Description
Author: Ahmad Faruqui
Publisher: Springer Science & Business Media
ISBN: 1461508339
Category : Business & Economics
Languages : en
Pages : 372
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Book Description
Electricity Pricing In Transition is written to address the new issues facing utilities, retailers, regulators, and customers in the changing electricity market. It is organized into five sections. Section I deals with the new restructured organization that has emerged from yesterday's vertically integrated, regulated monopoly company. Section II deals with issues in competitive pricing. Section III reviews the role of demand response and product design in today's chaotic marketplace. Given the single importance of California's energy crisis and the fact that it will be studied for years to come, Section IV is devoted to studying the lessons learned from this crisis. The final section of the book deals with markets and regulations. This book will provide practitioners with guidance on how to avoid the major pitfalls in pricing electricity while the market is in transition by drawing upon the insights and lessons learned from the experience of others that are documented in this book.
Author: Eric Hirst
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Abstract The US electric-utility industry is in the midst of major changes. These changes include deintegration of the industry and substantial increases in competition. A major consequence of these changes is the exposure of transition costs. These costs, which amount to $100-$200 billion nationwide, reflect the differences between regulated prices for electricity generation and the prices that might occur in fully competitive power markets. The large financial stakes, equivalent to nearly the total value of US electric-utility common stock, guarantee controversy. Debates occur over transition-cost amounts; analytical and market methods to estimate these costs; the assets and liabilities to include in such calculations; the assumptions used in developing these estimates; approaches that can be used to offset some of these costs; the allocation of the remaining costs among utility shareholders, different classes of retail customers, independent power producers and other wholesale suppliers, and taxpayers; and appropriate cost-recovery mechanisms.
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 72
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Book Description
Transition costs are the potential monetary losses that electric- utility shareholders, ratepayers, or other parties might experience because of structural changes in the electricity industry. Regulators, policy analysts, utilities, and consumer groups have proposed a number of strategies to address transition costs, such as immediately opening retail electricity markets or delaying retail competition. This report has 3 objectives: identify a wide range of strategies available to regulators and utilities; systematically examine effects of strategies; and identify potentially promising strategies that may provide benefits to more than one set of stakeholders. The many individual strategies are grouped into 6 major categories: market actions, depreciation options, rate-making actions, utility cost reductions, tax measures, and other options. Of the 34 individual strategies, retail ratepayers have primary or secondary responsibility for paying transition costs in 19 of the strategies, shareholders in 12, wheeling customers in 11, taxpayers in 8, and nonutility suppliers in 4. Most of the strategies shift costs among different segments of the economy, although utility cost reductions can be used to offset transition costs. Most of the strategies require cooperation of other parties, including regulators, to be implemented successfully; financial stakeholders must be engages in negotiations that hold the promise of shared benefits. Only by rejecting ''winner-take-all'' strategies will the transition-cost issue be expeditiously resolved.
Author: Peter Navarro
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 206
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Book Description
Author: Edward Berlin
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 216
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Book Description
A report to the Energy Policy Project of the Ford Foundation.
Author: A. Lawrence Kolbe
Publisher: Springer Science & Business Media
ISBN: 1461532345
Category : Business & Economics
Languages : en
Pages : 357
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Book Description
It is common to assert that utility investors are compensated in the allowed rate of return for the risk of large disallowances, such as arise for investments found imprudent or not `used and useful'. However, this book develops a new theory of asymmetric regulatory risk that shows that infallible estimates of the cost of capital are sure to provide downward-biased estimates of the necessary allowed rates of return in the presence of such regulatory risks. The book uses the new theory of regulatory risk to understand recent developments in the risk of natural gas pipelines and other regulated industries.
