Let's Get Physical! Or Financial? A Study of Electricity Transmission Rights
AbstractI test experimentally the predictions of neoclassical theory for a radial electricity market without rights to the transmission line, with rights that give the owner a financial right to a share of the transmission congestion charges collected by a network operator, and with physical rights which give the owner the exclusive right to utilize a portion of the transmission line. I find that physical rights lead to more "right" market signals, diminish some market-power, and remove an uncertainty about electricity transmission congestion better than financial rights or the absence of rights.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Regulatory Economics.
Volume (Year): 25 (2004)
Issue (Month): 2 (03)
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Web page: http://www.springerlink.com/link.asp?id=100298
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- Sun, Junjie, 2005. "U.S. Financial Transmission Rights: Theory and Practice," Staff General Research Papers 12266, Iowa State University, Department of Economics.
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