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Capacity Rationing and Fixed Cost Collection

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  • Chi-Keung Woo

Abstract

This paper proposes a simple load management program with a twopart tariff to ration an electric utility's installed capacity and to collect its fixed costs under asymmetric information and demand uncertainty. Because of its simplicity, the program is a practical alternative to spot pricing and rationing schemes with highly nonlinear rate structures.

Suggested Citation

  • Chi-Keung Woo, 1991. "Capacity Rationing and Fixed Cost Collection," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 153-163.
    • Handle: RePEc:aen:journl:1991v12-02-a09
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    Citations

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    Cited by:

    1. Seeto, Dewey & Woo, C. K. & Horowitz, Ira, 1997. "Time-of-use rates vs. Hopkinson tariffs redux: An analysis of the choice of rate structures in a regulated electricity distribution company," Energy Economics, Elsevier, vol. 19(2), pages 169-185, May.
    2. Brown, David P. & Sappington, David E.M., 2018. "On the role of maximum demand charges in the presence of distributed generation resources," Energy Economics, Elsevier, vol. 69(C), pages 237-249.
    3. Woo, C.K. & Milstein, I. & Tishler, A. & Zarnikau, J., 2019. "A wholesale electricity market design sans missing money and price manipulation," Energy Policy, Elsevier, vol. 134(C).
    4. C.K. Woo & Brian Horii & Ira Horowitz, 2002. "The Hopkinson tariff alternative to TOU rates in the Israel Electric Corporation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 23(1), pages 9-19.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

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