Uncertain markets, reliability and peak-load pricing

Journal Article · Wed Apr 01 04:00:00 EST 1981 · South. Econ. J.; (United States)

DOI:https://doi.org/10.2307/1058152· OSTI ID:6528793

Saving, T R ^[1]; De Vany, A S

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1. Texas A and M Univ., College Station

A model is developed to study the market determination of peak-load prices in an unregulated monopoly and a competitive market under uncertainty. The results show that competition is efficient when it is feasible. Prices equal the constant reliability marginal cost, although they exceed the expected marginal cost. The results also show that increases in capital decrease the constant reliability marginal cost for all periods where reliability is important. This suggests that efforts to reduce excess capacity with peak-load pricing could also reduce reliability efficiency. Monopolist pricing which discriminates between temporal demand periods is more likely to lead to peak-load pricing than a competitve market. 19 references, 2 figures. (DCK)

• OSTI ID: 6528793
• Journal Information: South. Econ. J.; (United States), Journal Name: South. Econ. J.; (United States) Vol. 47:4; ISSN SECJA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
296000* -- Energy Planning & Policy-- Electric Power
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320603 -- Energy Conservation
Consumption
& Utilization-- Municipalities & Community Systems-- Public Utilities-- (1980-)
COMPETITION
ECONOMETRICS
ECONOMIC ANALYSIS
ECONOMICS
MARKET
MONOPOLIES
PEAK-LOAD PRICING
PRICES
RELIABILITY