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Funding for Universal Service Obligations in Electricity Sector : the case of green power development

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Author Info

  • Favard, P.
  • Mirabel, F.
  • Poudou, J.-C.

Abstract

The process of deregulation in network industries, in particular in the electric sector, raises the problem of Þnancing the Universal Service Obligations (USO) corresponding to the production, transport and distribution operations. In this paper, we study three ways of funding for an USO of production, especially the "green" electricity development: the Þnancing with cross-subsidies, the implementation of a fund (financing by a tax) and finally a voluntary funding system by direct subscriptions of consumers. We notably show that this last one Pareto dominates mostly, from a welfare point of view, the other scenarios.

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Bibliographic Info

Paper provided by CREDEN (Centre de Recherche en Economie et Droit de l'Energie), Faculty of Economics, University of Montpellier 1 in its series Cahiers du CREDEN (CREDEN Working Papers) with number 02.07.33.

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Length: 36 pages
Date of creation: 2002
Date of revision:
Handle: RePEc:mop:credwp:02.07.33

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Postal: CREDEN, Faculté d'Economie, Avenue Raymond Dugrand, CS 79606, 34960 MONTPELLIER Cedex 2, France
Phone: 33 (0)4 67 15 83 60
Fax: 33 (0)4 67 15 84 04
Web page: http://www.creden.univ-montp1.fr
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Keywords: ELECTRICITY ; ENVIRONMENT ; REGULATION ; NETWORK ; UNIVERSAL SERVICE;

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  1. Armstrong, M. & Doyle, C. & Vickers, J., 1995. "The access pricing problem: a synthesis," Discussion Paper Series In Economics And Econometrics 9532, Economics Division, School of Social Sciences, University of Southampton.
  2. Greenwood, J. & Macfee, R.P., 1989. "Externalities And Asymmetric Information," RCER Working Papers 173, University of Rochester - Center for Economic Research (RCER).
  3. Wiser, Ryan H. & Fowlie, Meredith & Holt, Edward A., 2001. "Public goods and private interests: understanding non-residential demand for green power," Energy Policy, Elsevier, vol. 29(13), pages 1085-1097, November.
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