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

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  • 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 financing 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 funding with cross-subsidies, the implementation of a fund (funding 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 LASER (Laboratoire de Science Economique de Richter), Faculty of Economics, University of Montpellier 1 in its series Cahiers du LASER (LASER Working Papers) with number 2002.06.

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Length: 36 pages
Date of creation: 2002
Date of revision:
Handle: RePEc:mop:lasrwp:2002.06

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Postal: LASER, Faculté d'Economie, Avenue Raymond Dugrand, CS 79606, 34960 MONTPELLIER Cedex 2, France
Web page: http://www.laser.univ-montp1.fr
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Keywords: ELECTRICITY ; ENVIRONMENT ; REGULATION ; NETWORK ; UNIVERSAL SERVICE;

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  1. 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.
  2. Greenwood, J. & Mcafee, R.P., 1989. "Externalities And Asymmetric Information," University of Western Ontario, The Centre for the Study of International Economic Relations Working Papers 8914, University of Western Ontario, The Centre for the Study of International Economic Relations.
  3. Armstrong, Mark & Doyle, Chris & Vickers, John, 1996. "The Access Pricing Problem: A Synthesis," Journal of Industrial Economics, Wiley Blackwell, vol. 44(2), pages 131-50, June.
  4. 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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