Transition-cost issues for a restructuring US electricity industry
Utilities regulators can use a variety of approaches to calculate transition costs. We categorized these approaches along three dimensions. The first dimension is the use of administrative vs. market procedures to value the assets in question. Administrative approaches use analytical techniques to estimate transition costs. Market valuation relies on the purchase price of particular assets to determine their market values. The second dimension concerns when the valuation is done, either before or after the restructuring of the electricity industry. The third dimension concerns the level of detail involved in the valuation, what is often called top-down vs. bottom-up valuation. This paper discusses estimation approaches, criteria to assess estimation methods, specific approaches to estimating transition costs, factors that affect transition-cost estimates, strategies to address transition costs, who should pay transition costs, and the integration of cost recovery with competitive markets.
- Research Organization:
- Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States)
- Sponsoring Organization:
- USDOE Assistant Secretary for Energy Efficiency and Renewable Energy, Washington, DC (United States)
- DOE Contract Number:
- AC05-96OR22464
- OSTI ID:
- 560720
- Report Number(s):
- ORNL/CON-440; ON: DE98051661; BR: EK 6003000
- Resource Relation:
- Other Information: PBD: Mar 1997
- Country of Publication:
- United States
- Language:
- English
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