Will competition hurt electricity consumers in the Pacific Northwest
Abstract
A computer model was developed at Oak Ridge National Laboratory to analyze the electricity production, costs, and prices for two geographical regions for a single year. Bulk-power trading is allowed between the two regions and market clearing prices are determined based on marginal costs. The authors used this model, ORCED, to evaluate the market price of power over the year 2000 in the Pacific Northwest and California. The authors found that, absent intervention by the regulators in the Northwest, generation prices would increase 1.1 {cents}/kWh on average, from 1.91 {cents}/kWh for the regulated price to 3.02 {cents}/kWh as the competitive price. If regulators use transition charges and price caps, then customers in the Pacific Northwest need not be penalized by the change to marginal-cost pricing. Customer responses to price changes will increase the transfer of power between regions. A gas price increase of 20%, while only raising the average-cost-based price to 1.95 {cents}/kWh, raised the marginal-cost-based price to 3.56{cents}/kWh. Reductions in hydroelectric resources also dramatically change the price and flow of power.
- Authors:
- Publication Date:
- Research Org.:
- Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States)
- Sponsoring Org.:
- USDOE Assistant Secretary for Human Resources and Administration, Washington, DC (United States)
- OSTI Identifier:
- 676963
- Report Number(s):
- ORNL/CP-98924; CONF-980553-
ON: DE99000370; BR: 42WJ06901; TRN: AHC29821%%96
- DOE Contract Number:
- AC05-96OR22464
- Resource Type:
- Conference
- Resource Relation:
- Conference: 21. annual international conference of the International Association of Energy Economists, Quebec City (Canada), 13-16 May 1998; Other Information: PBD: [1998]
- Country of Publication:
- United States
- Language:
- English
- Subject:
- 29 ENERGY PLANNING AND POLICY; ELECTRIC POWER; PRICES; COMPUTERIZED SIMULATION; O CODES; CALIFORNIA; USA; COMPETITION; CONSUMER PROTECTION
Citation Formats
Hadley, S, and Hirst, E. Will competition hurt electricity consumers in the Pacific Northwest. United States: N. p., 1998.
Web. doi:10.2172/573097.
Hadley, S, & Hirst, E. Will competition hurt electricity consumers in the Pacific Northwest. United States. https://doi.org/10.2172/573097
Hadley, S, and Hirst, E. 1998.
"Will competition hurt electricity consumers in the Pacific Northwest". United States. https://doi.org/10.2172/573097. https://www.osti.gov/servlets/purl/676963.
@article{osti_676963,
title = {Will competition hurt electricity consumers in the Pacific Northwest},
author = {Hadley, S and Hirst, E},
abstractNote = {A computer model was developed at Oak Ridge National Laboratory to analyze the electricity production, costs, and prices for two geographical regions for a single year. Bulk-power trading is allowed between the two regions and market clearing prices are determined based on marginal costs. The authors used this model, ORCED, to evaluate the market price of power over the year 2000 in the Pacific Northwest and California. The authors found that, absent intervention by the regulators in the Northwest, generation prices would increase 1.1 {cents}/kWh on average, from 1.91 {cents}/kWh for the regulated price to 3.02 {cents}/kWh as the competitive price. If regulators use transition charges and price caps, then customers in the Pacific Northwest need not be penalized by the change to marginal-cost pricing. Customer responses to price changes will increase the transfer of power between regions. A gas price increase of 20%, while only raising the average-cost-based price to 1.95 {cents}/kWh, raised the marginal-cost-based price to 3.56{cents}/kWh. Reductions in hydroelectric resources also dramatically change the price and flow of power.},
doi = {10.2172/573097},
url = {https://www.osti.gov/biblio/676963},
journal = {},
number = ,
volume = ,
place = {United States},
year = {Sun Nov 01 00:00:00 EST 1998},
month = {Sun Nov 01 00:00:00 EST 1998}
}