Stranded cost recovery presents stumbling block to open access
Much of the impetus for the movement to competitive power markets is a result of the tremendous variance in energy prices across the country. Large commercial and industrial customers are becoming increasingly aware of these discrepancies and are marshaling the market and political forces required to guarantee the eventual development of a national open-access transmission policy. Such a policy will facilitate competition and equalize prices on a regional, and to some extent, national level. The stumbling block, however, is the recovery of stranded investment. Under traditional regulation, historical costs could be collected through approved rates for a bundled service. With the protection of a monopoly franchise, average electricity prices provide the possibility of cost recovery for assets that might not be recoverable in a competitive market.
- OSTI ID:
- 376893
- Journal Information:
- Electric Light and Power, Vol. 74, Issue 4; Other Information: PBD: Apr 1996
- Country of Publication:
- United States
- Language:
- English
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