Transition-cost issues for US electricity utilities

Journal Article · Wed Dec 31 04:00:00 EST 1997 · Annual Review of Energy and the Environment

DOI:https://doi.org/10.1146/annurev.energy.22.1.119· OSTI ID:566236

Hirst, E; Baxter, L; Hadley, S ^[1]

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1. Oak Ridge National Lab., TN (United States)

The US electric-utility industry is in the midst of major changes. These changes include deintegration of the industry and substantial increases in competition. A major consequence of these changes is the exposure of transition costs. These costs, which amount to $100--$200 billion nationwide, reflect the differences between regulated prices for electricity generation and the prices that might occur in fully competitive power markets. The large financial stakes, equivalent to nearly the total value of US electric-utility common stock, guarantee controversy. Debates occur over transition-cost amounts; analytical and market methods to estimate these costs; the assets and liabilities to include in such calculations; the assumptions used in developing these estimates; approaches that can be used to offset some of these costs; the allocation of the remaining costs among utility shareholders, different classes of retail customers, independent power producers and other wholesale suppliers, and taxpayers; and appropriate cost-recovery mechanisms.

• OSTI ID: 566236
• Journal Information: Annual Review of Energy and the Environment, Journal Name: Annual Review of Energy and the Environment Vol. 22; ISSN ANEEER; ISSN 1056-3466
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
COMPETITION
ECONOMICS
ELECTRIC POWER
ELECTRIC UTILITIES
MARKET