Transmission Pricing and Stranded Costs in the Electric Power Industry

Baumol, William J.; Sidak, J. Gregory

ISBN 10: 0844739227 / ISBN 13: 9780844739229

Published by UNKNO, 1995

About this Item

Seller Inventory # 10.3M_MN_H000672J

Bibliographic Details

• Title: Transmission Pricing and Stranded Costs in the Electric Power Industry
• Publisher: UNKNO
• Publication Date: 1995
• Language: English
• ISBN 10: 0844739227
• ISBN 13: 9780844739229
• Binding: Hardcover
• Condition: New

About this title

Synopsis

Stranded costs are those costs that electric utilities currently permitted to recover through their rates but whose recovery may be impeded or prevented by the advent of competition in the industry. Estimates of those costs run from the tens to the hundreds of billions of dollars. Should regulators permit utilities to recover stranded costs while they take steps to promote competition in the electric power industry? William J. Baumol and J. Gregory Sidak argue that on both efficiency and equity grounds the answer to that question should be yes.
The authors show that a transmission price, the price for sending electricity over the transmission grid, can be determined in a manner that is compatible with economic efficiency and clearly neutral in its effects upon all competitors in electricity generation. A correctly constructed regime of transmission pricing may in fact achieve the efficiency and equity goals that justify the recovery of stranded costs.

About the Author

William J. Baumol is director of the C. V. Starr Center for Applied Economics at New York University and the Joseph Douglas Green 1895 Professor Emeritus of Economics and senior research economist at Princeton University.