Peak load pricing in the electric utility industry

Journal Article · · Bell J. Econ. Manage. Sci.; (United States)

DOI:https://doi.org/10.2307/3003198· OSTI ID:7269607

Wenders, J T

In the electric utility industry, cost minimization requires that heterogeneous electric generation technologies be used to produce electricity demands of different durations. In contrast to the conclusions of traditional peak-load pricing theory, the existence of a heterogeneous capital stock means that off-peak marginal cost prices almost always should include some marginal capacity costs, and that the profit maximizing regulated electric utility may set peak price above marginal cost and off-peak price below marginal cost in order to encourage the expansion of capital-intensive base load generating capacity. (auth)

• Research Organization: Univ. of Arizona, Tucson
• OSTI ID: 7269607
• Journal Information: Bell J. Econ. Manage. Sci.; (United States), Journal Name: Bell J. Econ. Manage. Sci.; (United States) Vol. 7:1; ISSN BJEMA
• 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
CHARGES
COST
ECONOMICS
ELECTRIC POWER
PEAK-LOAD PRICING
POWER
PUBLIC UTILITIES
REGULATIONS