Look at European ratemaking

Journal Article · Fri Apr 15 04:00:00 EST 1977 · Electr. World; (United States)

OSTI ID:7223364

France and England claim great success with time-of-day marginal-cost rate structure. The Electricity Consumers Council retained Dr. Hans E. Nissel in the summer of 1976 to accompany two of its representatives to France, England, and W. Germany to determine if there is an objective basis for these claims. Based on the study, Dr. Nissel concluded that: (1) there is no basis to indicate that the French or English electric systems have achieved any major savings in capacity by using marginal-cost rates; (2) many utilities (including those in the US) have had success in direct control of loads through such techniques as interruptible rates and storage heaters; (3) the nationalized power systems of France and England have sustained considerable financial losses over the past five years; (4) peak-load pricing, based on marginal cost, is not used for residential customers in either England or France; (5) the French discontinued use of marginal-cost pricing in October 1974, as a result of their system's non-optimality, and they are now using average fuel cost and standard price indices when their rates are increased; and (6) the ratio of the average industrial rate to the average residential rate is approximately the same in Europe as in the US. Nissel said it is no accident that marginal-cost pricing has been tried primarily by government-owned electricity-supply systems. Once the system is owned by the government, it becomes, unavoidably, a prime target for experimentation with economic theories. He adds that, if the government owns the utility system, it also can enforce any experiment it chooses, and absorb losses that may result. (MCW)

• OSTI ID: 7223364
• Journal Information: Electr. World; (United States), Journal Name: Electr. World; (United States) Vol. 187:8; ISSN ELWOA
• Country of Publication: United States
• Language: English

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CHARGES
COMPARATIVE EVALUATIONS
ELECTRIC POWER
ENERGY SUPPLIES
EUROPE
FRANCE
GERMAN FEDERAL REPUBLIC
MARKET
NORTH AMERICA
POWER
PUBLIC UTILITIES
UNITED KINGDOM
USA