Resources and Energy最新文献

This paper identifies two trends in the structure of the electric utility industry: an increasingly competitive wholesale market and horizontal mergers in the industry. The paper summarizes current institutions and spells out present legal oversight as divided between federal and state officials. Technological progress has pushed the efficient operational area beyond the geographic bounds that regulation has traditionally operated within; thus, transmission facilities often benefit a wider area than the regulatory jurisdiction where they are located. Regulation has not allocated risk well in the past. The paper catalogs regulatory or policy actions that indicate these two trends. Current restructuring objectives include expanded transmission access, improved transmission pricing, and expeditiously constructed transmission. Finally, pro-market, pro-merger and go-slow proponents of change are described. FERC's Transmission Task Force Report offers two strategies: prepare sweeping changes or reform in increments with obstacles removed as they arise.

This paper offers four general observations and outlines important topics in each issue area for later discussion. The observations include: any changes in regulation should provide net benefits; ‘obligation to serve’ may be inconsistent with free entry and free exit; regulatory objectives should be flexible; and regulators should better match rewards with risks taken. The remainder of the paper also summarizes important topics in incentives regulation, environmental regulation, innovative pricing, demand side management, transmission access, and industry structure prior to the panel discussion.

This paper assesses the increasing tendency of public utility regulators in the 1980s to require utility companies to practice ‘least cost planning’ and in particular to treat demand side conservation measures on a parity with expansion of supply. It discusses the magnitude and causes of the persistence of unexploited opportunities for efficient conservation. Its principal conclusions are that subsidies for conservation should be limited to the extent to which the marginal cost of electricity supply exceeds the price, and that conservation programs should minimize the cross-subsidization of participants by non-participants.

The Clean Air Act Amendments of 1990 require electric utilities to reduce sulfur dioxide emissions and establishes a system of tradeable emission allowances to achieve this objective. This paper develops a model of utility investment decisionmaking that shows how regulatory rules will affect the utility's incentive to choose among different compliance strategies. The results of the model are extended to the overall market for emission allowances to show how the benefits from trading can be affected by regulatory rules. The analysis provides guidance for public utility regulation that will help achieve the social objective of minimizing the cost of pollution control.

This paper describes methods of introducing energy conservation as an alternative to additional generation. Such strategies should be followed if conservation costs less than generation. However, many existing utility conservation programs have not succeeded because they have increased utility costs while reducing utility sales thus resulting in reduced utility profits. Such programs have also provided inequities for consumers. The paper compares a traditional conservation program with an innovative program where utilities are able to charge consumers for energy saved as a result of utility conservation investment. This innovative program eliminates many of the problems associated with the traditional programs.

The author here argues that to maximize efficiency in the production and consumption of electricity, its price to the consumer should be varied in real time according to the short-run marginal social cost of providing power at various times and places, through remote control metering. To motivate privately-owned utilities to set prices in this manner he proposes the use of an escrow find to or from which would flow the difference between the responsive rate paid by the customer and the regulated retention rate established by regulatory proceedings. With consumption subject to instantaneous control through price, spinning reserves would no longer be needed and emergencies could be dealt with with fewer blackouts. How to calculate short-run marginal social cost under various circumstances is discussed in detail, and also how prices should differ from marginal cost to allow for costs involved in the provision of subsidies.

This article examines the difficulties of regulating public utilities which serve both noncompetitive and competitive markets. Problems with the administration of traditional rate of return regulation as utilities have diversified into competitive markets have led regulators to consider adopting alternative forms of regulation that allow the firm and the customers in noncompetitive markets to share in the economic benefits of production, including ‘price cap’ regulation. The article examines the efficacy of price caps as one possible form of regulatory bargain, both as a theoretical ideal and as they have been applied in practice. It also addresses explicitly the nature of another type of regulatory bargain designed to distribute net economic benefits to consumers and the firm.

This paper discusses Prof. Braeutigam's paper on regulatory reform as well as comments on the more general topic of incentives regulation. Certain restrictive assumptions in Braeutigam's paper, such as competition in non-core markets, are noted and the three major topics, regulatory reform, diversification and price caps are examined. The paper then turns to the more general topic of incentives regulation and points out further experimentation should continue, and traditional disincentives, such as disallowance and prudence reviews, should not be abandoned.