Excess capacity in utility industries: an inventory theoretic approach
Journal Article
·
· Land Econ.; (United States)
An analogous model similar to the economic ordering quantity inventory model is used to explain the factors involved in ordering and planning utility capacity and the reasons why a utility may be carrying excess capacity at a particular time. Inventory models may help explain the optimal level of system reserve margins on the grounds that carrying forward capacity leads to an analysis of a rational and equitable method of adding the reserved capacity to the rate base. Although utilities may carry more capacity than is apparently needed, such capacity may not be excess, and its existence should be recognized by the regulatory commission. 18 references, 3 figures, 1 table.
- Research Organization:
- Lehigh Univ., Bethlehem, PA
- OSTI ID:
- 7121980
- Journal Information:
- Land Econ.; (United States), Vol. 60:1
- Country of Publication:
- United States
- Language:
- English
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