Deregulation of Electric Utilities

Deregulation of Electric Utilities reviews the main issues relating to the changing environment in the utility industry. Topics covered in depth include compensation for stranded costs, efficiency gains, institutional design, pricing, economics of scale, and network externalities. In addition, this book assesses early experiences in electricity deregulation in continental Europe, New Zealand, North America, and the United Kingdom.

1 IPPs get VAMMoed in Texas.- 1.1 Introduction.- 1.2 Background.- 1.3 Transmission Tariffs.- 1.4 The ERCOT Transmission Tariff.- 1.5 Conclusion.- References.- 2 Competition and Direct Access in New Zealand’s Electricity Market.- 2.1 Introduction.- 2.2 A Simple Model for the Electricity Market.- 2.3 The Electricity Distribution Market.- 2.4 Some Preliminary Econometric Results.- 2.5 Conclusions.- References.- 3 Competition and Access in Electricity Markets: ECPR, Global Price Cap, and Auctions.- 3.1 Introduction.- 3.2 Basic Principles and Fundamental Issues.- 3.3 Access Pricing Rules.- 3.4 Price Caps and Global Price Caps.- 3.5 Market Based Regulation or Managed Competition.- 3.6 Conclusion: Some Neglected Issues.- References.- 4 Periodic Regulatory Review in UK Electricity Markets; Developments Within a Deregulated System.- 4.1 Introduction.- 4.2 The Structure of the Price Controls in Electricity.- 4.3 Yardstick Comparisons.- 4.4 The Choice of X Factor.- 4.5 Regulation in Practice.- 4.6 The RECs’ Productivity 1971–96.- 4.7 Privatised Utility Profits in the RECs.- 4.8 Competitive Supply, Access, and Settlement.- 4.9 The Debate on Regulatory Mechanisms.- References.- 5 Challenges for Effective Competition in Large-Hydro Dominated Markets: The Case of Québec.- 5.1 Introduction.- 5.2 Obstacles to Competition.- 5.3 Standard Solutions.- 5.4 A Made-in-Québec Solution: The LGMC Contract.- 5.5 Other Obstacles and Imperatives to Competition.- 5.6 Other Considerations.- 5.7 Conclusion.- References.- 6 Hydroelectricity and the State in Quebec and Ontario: Two Different Historical Paths.- 6.1 Introduction.- 6.2 A Historical Survey of Electricity Regulatory Regimes in Canada.- 6.3 The Different Paths of Regulation in Central Canada: A Political Economy Approach.- 6.4Conclusion.- References.- 7 Restructuring and Competitive Arrangements in the Electricity Supply Industry Towards a Better Efficiency?.- 7.1 Introduction.- 7.2 The Incompatibility of Vertical Integration and Competition in the Supply: The Unsound Route of Third Party Access to the Network.- 7.3 Competitive De-integration through the Interlocking of Complex Arrangements.- 7.4 An Appraisal of Competitive De-integration.- 7.5 Conclusion.- References.- 8 Electricity Deregulation in England and Wales.- 8.1 Introduction.- 8.2 Competition in Generation.- 8.3 Competition in Supply.- 8.4 The Natural Monopolies.- 8.5 The Overall Effect of the Reforms.- 8.6 Conclusions.- References.- 9 Improving the Performance of Electricity Industries in Developing Countries: Is World Bank Policy on Deregulation the Way Forward?.- 9.1 Introduction.- 9.2 International Policy Towards Power Sector Development.- 9.3 Some Models to Follow.- 9.4 Performance and Efficiency Measurement.- 9.5 The Data.- 9.6 The Efficiency of Developing Countries’ Power Generation.- 9.7 Which Example to Follow?.- 9.8 Lending to Sub Saharan Africa (SSA).- 9.9 An Alternative Approach Using DEA Results.- 9.10 Conclusions and Limitations of the Analysis.- References.- Appendix: 1. Efficiencies of Power Sectors in Developing Countries.- Appendix: 2.- 10 Demand-Side Management Expenditures and the Market Value of U.S. Electric Utilities: Strategic Investment or Disinvestment?.- 10.1 Introduction.- 10.2 Previous Studies of Market Value/ Performance of Electric Utilities.- 10.3 “Radical” Deregulation of the U.S. Electric Power Market.- 10.4 Methodology.- 10.5 Empirical Estimation of Utility Market Value.- 10.6 DSM’s Role: Strategic Disinvestment by Utilities?.- 10.7 Summary.- References.- 11 Introducing Competition tothe Electricity Industry in Spain: The Role of Initial Conditions.- 11.1 Introduction.- 11.2 The MLE and the Definition of Stranded Costs.- 11.3 Vertical Relations in the Domestic Coal Industry.- 11.4 Industry Structure.- 11.5 Prospects for Competition.- 11.6 Conclusion.- References.- 12 Peak Load Problem, Deregulation and Reliability Pricing.- 12.1 Introduction.- 12.2 Peak Load Problem and Reliability Problem.- 12.3 Peak Load Reduction Mechanisms in a Deregulated Environment.- 12.4 Reliability Pricing Propositions.- 12.5 Research Avenues.- References.- 13 An Integrated Energy and Reserve Market for New Zealand.- 13.1 Introduction.- 13.2 Principles of a Reserve Market.- 13.3 Modelling Instantaneous Reserve.- 13.4 Experience.- References.- 14 Transmission Contracts May also Hinder Detrimental Network Investments in Oligopolistic Electricity Markets.- 14.1 Introduction.- 14.2 A Three Node Example with Market Power.- 14.3 Some Reinterpretation.- 14.4 The Conjecture.- 14.5 Conclusion.- References.- Appendix: 1.- Appendix: 2.