Economies of scale and vertical integration in the investor-owed electric utility industry
Abstract
This report analyzes the nature of costs in a vertically integrated electric utility. Findings provide new insights into the operations of the vertically integrated electric utility and supports earlier research on economics of scale and density; results also provide insights for policy makers dealing with electric industry restructuring issues such as competitive structure and mergers. Overall, results indicate that for most firms in the industry, average costs would not be reduced through expansion of generation, numbers of customers, or the delivery system. Evidently, the combination of benefits from large-scale technologies, managerial experience, coordination, or load diversity have been exhausted by the larger firms in the industry; however many firms would benefit from reducing their generation-to-sales ratio and by increasing sales to their existing customer base. Three cost models were used in the analysis.
- Authors:
-
- Christensen Associates, Madison, WI (United States)
- Publication Date:
- Research Org.:
- National Regulatory Research Inst., Columbus, OH (United States)
- Sponsoring Org.:
- National Association of Regulatory Utility Commissioners, Washington, DC (United States)
- OSTI Identifier:
- 231328
- Report Number(s):
- NRRI-96-05
ON: DE96011045
- Resource Type:
- Technical Report
- Resource Relation:
- Other Information: PBD: Jan 1996
- Country of Publication:
- United States
- Language:
- English
- Subject:
- 29 ENERGY PLANNING AND POLICY; ELECTRIC UTILITIES; VERTICAL INTEGRATION; ECONOMIC ANALYSIS; POWER GENERATION; COST; ECONOMETRICS
Citation Formats
Thompson, H G, Islam, M, and Rose, K. Economies of scale and vertical integration in the investor-owed electric utility industry. United States: N. p., 1996.
Web.
Thompson, H G, Islam, M, & Rose, K. Economies of scale and vertical integration in the investor-owed electric utility industry. United States.
Thompson, H G, Islam, M, and Rose, K. 1996.
"Economies of scale and vertical integration in the investor-owed electric utility industry". United States.
@article{osti_231328,
title = {Economies of scale and vertical integration in the investor-owed electric utility industry},
author = {Thompson, H G and Islam, M and Rose, K},
abstractNote = {This report analyzes the nature of costs in a vertically integrated electric utility. Findings provide new insights into the operations of the vertically integrated electric utility and supports earlier research on economics of scale and density; results also provide insights for policy makers dealing with electric industry restructuring issues such as competitive structure and mergers. Overall, results indicate that for most firms in the industry, average costs would not be reduced through expansion of generation, numbers of customers, or the delivery system. Evidently, the combination of benefits from large-scale technologies, managerial experience, coordination, or load diversity have been exhausted by the larger firms in the industry; however many firms would benefit from reducing their generation-to-sales ratio and by increasing sales to their existing customer base. Three cost models were used in the analysis.},
doi = {},
url = {https://www.osti.gov/biblio/231328},
journal = {},
number = ,
volume = ,
place = {United States},
year = {Mon Jan 01 00:00:00 EST 1996},
month = {Mon Jan 01 00:00:00 EST 1996}
}