Getting the transcos right

Electricity Journal

Volumn 11, Issue 9, 1998, Pages 47-52

  Lenard, Thomas M ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0032209914     PISSN: 10406190     EISSN: None     Source Type: Journal    
DOI: 10.1016/S1040-6190(98)00097-9     Document Type: Article

References (11)

1. The views expressed here are solely those of the author and do not necessarily represent the views of the board, officers or staff of The Progress & Freedom Foundation. Many of the ideas presented here are discussed in greater detail in MICHAEL K. BLOCK AND THOMAS M. LENARD, DEREGULATING ELECTRICITY: THE FEDERAL ROLE (The Progress & Freedom Foundation, April 1998).
2. See William W. Hogan, "FERC Policy on Independent System Operators: Supplemental Comments," FEDERAL ENERGY REGULATORY COMMISSION Docket No. PL98-5-000, May 1, 1998.
3. Social cost refers to the real resource costs to society, rather than the costs to the individual firm or consumer. Optimal resource allocation generally requires that social and private costs be the same.
4. Source for cost estimates is Allied Signal.
5. This framework has been called the "Centralization of Authority" or "Maximum ISO" scenario by Thomas and Schneider (to be distinguished from the "Minimum ISO" scenario, in which the ISO has no authority over prices). See Robert J. Thomas and Thomas R. Schneider, "Underlying Technical Issues in Electricity Deregulation," presented at the 30th Hawaii International Conference on System Sciences, January 7-10, 1997. As discussed below in Section III, voluntary pools are routinely formed today, and could also be under market-based systems, to efficiently coordinate activities.
6. Some have suggested that owners receive congestion rents, but that these rents be deducted from the regulated payments the owners receive to cover their embedded costs.
7. Congestion contracts might be awarded to those who expand the network so that they are protected against congestion charges on their expansions.
8. William W. Hogan, "Getting the Prices Right in PJM: April Analysis and Summary," May 4, 1998. This was expanded upon and updated in ELEC. J., Aug./ Sept. 1998.
9. Steven Stoft, California's ISO: Why Not Clear the Market?, ELEC. J., Dec. 1996, at 38-43.
10. William W. Hogan, Contract Networks for Electric Power Transmission, J. OF REGULATORY ECON. (4:211-242, 1992).
11. PAUL L. JOSKOW AND RICHARD SCHMALENSEE, MARKETS FOR POWER: AN ANALYSIS OF ELECTRIC UTILITY DEREGULATION (MIT Press, 1983) at 66-77.