Marginal cost pricing of distribution gas - a consumer protection perspective

Journal Article · Thu Oct 23 04:00:00 EDT 1980 · Public Util. Fortn.; (United States)

OSTI ID:6108197

Bossert, R W; Yoon, S

Gas distribution companies in New York State are now mandated to include analyses of marginal-commodity and marginal-capacity costs in their rate filings. Moreover, they must explain how proposed rate structures for all firm customers reflect the marginal cost or alternatively explain the reason for any divergence of rates from the marginal cost. There are several distinct measures of the marginal cost of distribution gas; the knowledge of each is important in the design and evaluation of a distribution company's gas tariffs. These measures are (1) the marginal cost of gas to the consumer, (2) the marginal opportunity cost of gas to the consumer, (3) the marginal social resource cost of gas, and (4) the marginal private resource cost of gas to the distribution company. All of these measures have short-run and long-run aspects that reveal the economic efficiency of gas consumption. An economic model blending these marginal costs produces a pricing mechanism that optimizes the price of gas in terms of society's net economic benefits.

• OSTI ID: 6108197
• Journal Information: Public Util. Fortn.; (United States), Journal Name: Public Util. Fortn.; (United States) Vol. 106; ISSN PUFNA
• Country of Publication: United States
• Language: English

Related Subjects

03 NATURAL GAS
030600* -- Natural Gas-- Economic
Industrial
& Business Aspects
ENERGY SOURCES
ENERGY SYSTEMS
FEDERAL REGION II
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GAS UTILITIES
GASES
MARGINAL-COST PRICING
NATURAL GAS
NATURAL GAS DISTRIBUTION SYSTEMS
NEW YORK
NORTH AMERICA
PRICES
PUBLIC UTILITIES
USA