Peak Load Pricing in the Electric Utility Industry
AbstractIn 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by The RAND Corporation in its journal Bell Journal of Economics.
Volume (Year): 7 (1976)
Issue (Month): 1 (Spring)
Contact details of provider:
Web page: http://www.rje.org
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- N. Vijayamohanan Pillai, 2003. "A contribution to peak load pricing theory and application," Centre for Development Studies, Trivendrum Working Papers 346, Centre for Development Studies, Trivendrum, India.
- Friedman, Lee S., 2011. "The importance of marginal cost electricity pricing to the success of greenhouse gas reduction programs," Energy Policy, Elsevier, vol. 39(11), pages 7347-7360.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.