Mechanisms of Funding for Universal Service Obligations: the Electricity Case
AbstractThe transition towards a more competitive regime in network industries (and specially in electricity sector) raises the relevant question of funding for the Universal Service Obligations (USOs). Our paper focuses on two ways of funding for universal service and equal treatment obligations (Ubiquity and Non Discrimination constraints): the funding through access charge (CS regime) or taxation (T regime). Using a network model including competition between an historical monopoly (in charge for the USOs) and an entrant, we obtain some results concerning gains and losses of social welfare due to those mechanisms. We show that most of the time it is socially better to let the historical monopoly be active whatever the type of funding for USOs applying, and whatever profitability of the firms is. However, when the entrant is active, we can highlight that the introduction of the T regime (compared to the CS one) implies either welfare deterioration or an entry prevention strategy by the historical Þrm. Therefore, the T regime could not be an argument for the regulator to promote vertical separation of the historical firm (according to the European community line).
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 InfoPaper 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 03.11.41.
Length: 29 pages
Date of creation: 2003
Date of revision:
Contact details of provider:
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
More information through EDIRC
ELECTRICITY SECTOR; NETWORKS; REGULATION; UNIVERSAL SERVICE;
Other versions of this item:
- Mirabel, Francois & Poudou, Jean-Christophe, 2004. "Mechanisms of funding for Universal Service Obligations: the electricity case," Energy Economics, Elsevier, vol. 26(5), pages 801-823, September.
- D4 - Microeconomics - - Market Structure and Pricing
- L5 - Industrial Organization - - Regulation and Industrial Policy
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
- Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anton, James J & Vander Weide, James H & Vettas, Nikolaos, 1998.
"Strategic Pricing and Entry under Universal Service and Cross-Market Price Constraints,"
CEPR Discussion Papers
1922, C.E.P.R. Discussion Papers.
- Anton, James J. & Vander Weide, James H. & Vettas, Nikolaos, 1999. "Strategic Pricing and Entry under Universal Service and Cross-Market Price Constraints," Working Papers 99-04, Duke University, Department of Economics.
- H. Cremer & F. Gasmi & A. Grimaud & J. J. Laffont, 2001. "Universal Service: An economic perspective," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 72(1), pages 5-43, 03.
- 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.
- Mark Armstrong, 2001. "Access Pricing, Bypass, and Universal Service," American Economic Review, American Economic Association, vol. 91(2), pages 297-301, May.
- Philippe Chone & Laurent Flochel & Anne Perrot, 2000.
"Allocating and Funding Universal Service Obligations in a Competitive Network Market,"
Econometric Society World Congress 2000 Contributed Papers
0213, Econometric Society.
- Philippe Choné & Laurent Flochel & Anne Perrot, 1999. "Allocating and Funding Universal Service Obligations in a Competitive Network Market," Working Papers 99-55, Centre de Recherche en Economie et Statistique.
- Chone, Philippe & Flochel, Laurent & Perrot, Anne, 2002. "Allocating and funding universal service obligations in a competitive market," International Journal of Industrial Organization, Elsevier, vol. 20(9), pages 1247-1276, November.
- Chone, Philippe & Flochel, Laurent & Perrot, Anne, 2000. "Universal service obligations and competition," Information Economics and Policy, Elsevier, vol. 12(3), pages 249-259, September.
- repec:fth:inseep:9955 is not listed on IDEAS
- Luo, Guo-liang & Guo, Yi-wei, 2013. "Rural electrification in China: A policy and institutional analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 23(C), pages 320-329.
- Mirabel, F. & Poudou, J.-C. & Roland, M., 2009. "Universal service obligations: The role of subsidization schemes," Information Economics and Policy, Elsevier, vol. 21(1), pages 1-9, February.
- Silvia Concettini & Anna Créti, 2013. "Liberalization of electricity retailing in Europe: coming back or going forth?," Working Papers hal-00915924, HAL.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Olivier ROUSSE).
If references are entirely missing, you can add them using this form.