Penalties for excess capacity in electric utilities
Journal Article
·
· Energy Systems and Policy; (USA)
OSTI ID:6565775
- Georgia Economic Forecasting Unit, Div. of Research, Univ. of Georgia, Athens, GA (US)
- Economics Dept., Univ. of Georgia, Athens, GA (US)
This article tests to determine whether regulated electric utilities are penalized for overinvesting in generating capacity. The ordinary least-squares results indicate that there is a significant inverse relationship between excess capacity and profits. Apparently regulatory and market forces impose penalties upon utilities with excess capacity. Thus, regulatory scrutiny of investment in generating capacity serves not only to simulate competitive market forces under natural monopoly conditions by lowering profits for utilities with redundant capacity but also serves to moderate the Averch-Johnson incentive to pad the rate base with nonproductive capacity.
- OSTI ID:
- 6565775
- Journal Information:
- Energy Systems and Policy; (USA), Journal Name: Energy Systems and Policy; (USA) Vol. 13:3; ISSN 0090-8347; ISSN ESYPB
- Country of Publication:
- United States
- Language:
- English
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Excess capacity: a utility viewpoint
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OSTI ID:6457286
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Mon Dec 31 23:00:00 EST 1984
·
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