Behavioral model of New York State electric utilities
A pricing and investment model is developed to analyze the behavior of New York State electric utilities. The model has two components. The first component uses a minimum discounted cash flow criterion to identify the least cost technology from among coal, oil, and nuclear. The second component, based on the neoclassical theory of investment, uses information from the first component to determine electricity prices and the level of investment. The neoclassical framework is extended to include monopoly market conditions, adjustment lags to price changes in demand, different demand classes and production regions, and a rate or return constraint on profits. Investment levels and prices are determined using three alternative objective functions; profit and revenue maximization (both subject to a rate of return constraint), and welfare maximization, implying that electricity prices equal marginal production costs. Results for the three alternative criteria fall into two groups. The welfare maximization model always leads to higher prices and less investment than either profit or revenue maximization. Results from the profit and revenue maximization models are similar since both are restricted by a rate of return constraint. Revenue maximization, however, always leads to a greater total demand than profit maximization.
- OSTI ID:
- 6135843
- Resource Relation:
- Other Information: Thesis (Ph. D.)
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
POLICY AND ECONOMY
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
ELECTRIC UTILITIES
INVESTMENT
PRICES
NEW YORK
ECONOMIC ANALYSIS
ECONOMICS
FEDERAL REGION II
NORTH AMERICA
PUBLIC UTILITIES
USA
296000* - Energy Planning & Policy- Electric Power
320603 - Energy Conservation
Consumption
& Utilization- Municipalities & Community Systems- Public Utilities- (1980-)