Welfare and efficiency benefits of all sources bidding
This study examines the impact of competitive bidding for new generating capacity on the electric utility industry. Competitive bidding for new generating capacity is a reform of the regulatory process designed to improve the efficiency of electricity production. Individual states have experimented with a number of schemes which aim at improving efficiency incentives (Joskow and Schmalensee, 1986). The bidding approach has been taken up at the federal level as well as by particular states. To make the analysis concrete, we focus on the impact of the Notices of Proposed Rulemaking (NOPR) issued by the Federal Energy Regulatory Commission (FERC) in March 1988 on bidding and independent power producers. In the two NOPRs, FERC proposes guidelines for power purchase auctions that will also involve reduced regulation for a class of wholesale generation suppliers known as Independent Power Producers (IPPs). IPPs are defined as entities that are selling from facilities that are not regulated on a cost-of-service basis, that do not control transmission facilities essential to the buyer, and, if they are a franchised utility, are selling to buyers outside their retail service territory. The essence of the FERC proposals is that IPPs be part of the auction process; hence the term ''all sources bidding.'' 28 refs.
- Research Organization:
- Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
- DOE Contract Number:
- AC03-76SF00098
- OSTI ID:
- 6008234
- Report Number(s):
- LBL-26212; ON: DE89012857
- Resource Relation:
- Other Information: Portions of this document are illegible in microfiche products
- Country of Publication:
- United States
- Language:
- English
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