Why We Need Electricity Retailers: A Reply to Joskow on Wholesale Spot Price pass-through
AbstractJoskow, P. and others propose that, with the opening of retail electricity markets, distribution utilities should be required to enable residential customers to buy at (averaged) wholesale spot market prices. They argue that retail electricity competitors should concentrate on value-added services rather than price competition. However, they have not acknowledged the importance of retail price competition, neglected the role of contract markets, and underestimated the costs and disadvantages of this proposed obligation. Recent experience in San Diego illustrates some of the problems. An alternative policy of maximum caps has been adopted in the UK that is facilitating a transition to a competitive regulated residential retail market.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0008.
Date of creation: Oct 2000
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Electricity supply; Utility regulation; Retail competition; Wholesale pass-through;
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- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
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