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Electricity Marginal Cost Pricing
1st Edition
Applications in Eliciting Demand Responses
Description
Packed with case studies and practical real-world examples, Electricity Marginal Cost Pricing Principles allows regulators, engineers and energy economists to choose the pricing model that best fits their individual market.
Written by an author with 13 years of practical experience, the book begins with a clear and rigorous explanation of the theory of efficient pricing and how it impacts investor-owned, publicly-owned, and cooperatively-owned utilities using tried and true methods such as multiple-output, functional form, and multiproduct cost models. The author then moves on to include self-contained chapters on applying estimating cost models, including a cubic cost specification and policy implications while supplying actual data and examples to allow regulators, energy economists, and engineers to get "a feel" for the methods with which efficient prices are derived in today’s challenging electricity market. The book is accompanied by a companion website which will allow for the testing of methods and validating results.
Key Features
- A guide to cost issues surrounding the generation, transmission, and distribution of electricity
- Clearly explains cost models which can yield the marginal cost of supplying electricity to end-users
- Real-world examples that are practical, meaningful, and easy to understand
- Explans the policy implications of each example
- Provide suggestions to aid in the formation of the optimal market price
Readership
Power Engineers, Electrical Engineers, Energy Engineers, Energy Economist, Environmental Engineers, Mechanical Engineers, and Industrial Engineers
Table of Contents
Preface
Acknowledgements
Chapter 1. Introduction
Introduction
Competitive Paradigm
Marginal Cost Pricing Doctrine
A Brief Overview of the United States Electric Market
Objective Functions: The Players
Reducing Carbon Emissions
Regulation of Investor-Owned Electric Utilities in the United States
Internalizing the Cost of Reducing Carbon Emissions
Optimal Rate/Tariff Design and Tax Credits to Promote Efficient Use of Energy and a Reduction in Carbon Emissions
Tariff Design and Rate-Making Issues
Conclusion
Chapter 2. The Theory of Natural Monopoly and Literature Review
The Natural Monopoly Conundrum
Defining Natural Monopoly
Economies of Scale
Efficient Industry Structure
Conclusion
Chapter 3. U.S. Electric Markets, Structure, and Regulations
Introduction
The U.S. Electric Industry Structure
Deregulation
Market Participants
Vertically Integrated Model
Industry Restructuring and the Competitive Electric Market
Regulation of the Electric Utility Industry
Looking Forward: Renewable Resources and Generating Technologies
Future of the Electric Industry
Chapter 4. The Economics (and Econometrics) of Cost Modeling
General Cost Model
The Econometrics of Cost Modeling: An Overview
A Brief History of Cost Models and Applications to the Electric Industry
Conclusion
Appendix
Chapter 5. Cost Models
Introduction
Determination of an Appropriate Objective Function: A Brief Overview of the Literature
Rural Electric Cooperatives
Differences between Coops and IOUs
Literature Review: Cost Studies on Rural Electric Cooperatives
Data
Review of the Literature: Cost Function Estimation in the Electric Utility Industry
Nerlove’s Cobb–Douglas Cost Model
Further Consider
Details
- No. of pages:
- 366
- Language:
- English
- Copyright:
- © 2012
- Published:
- 2nd February 2012
- Imprint:
- Butterworth-Heinemann
- eBook ISBN:
- 9780123854667
- Print ISBN:
- 9780123851345
About the author
Reviews
"Having trouble comprehending your electric bill? Think you can evaluate motor efficiency savings by using one simple number for price per kilowatt-hour? This book will enlighten you." --Electrical Apparatus, October 2012