Utility execs deny practical value of marginal pricing

Journal Article · Mon Nov 01 04:00:00 EST 1982 · Electr. Light Power; (United States)

OSTI ID:6658540

Utroska, D

Utility-industry executives who embrace the concept of marginal-cost pricing still reject it as impractical to implement because of the inelasticity of customer demand. Many feel that it is important for electricity prices to reflect their marginal costs, with provisions to tax profits in excess of power-conservation expenditures and welfare agencies providing relief for the poor. Others find this approach to be unfair to customers because of the disruptions that an abrupt shift to replacement-cost pricing will cause. Conceding that past utility pricing has misled the public on resource costs, the executives are equally concerned with the need to strengthen utility earnings and borrowing capacity. Some suggest a move to place construction work in progress (CWIP)in the rate base could provide an acceptable transition period, while others prefer gradual deregulation. (DCK)

• OSTI ID: 6658540
• Journal Information: Electr. Light Power; (United States), Journal Name: Electr. Light Power; (United States) Vol. 60:11; ISSN ELLPA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
296000* -- Energy Planning & Policy-- Electric Power
ECONOMIC ELASTICITY
ELECTRIC POWER
ELECTRIC UTILITIES
EVALUATION
MARGINAL-COST PRICING
POWER
PRICES
PRICING REGULATIONS
PUBLIC UTILITIES
REGULATIONS