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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.

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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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File URL: http://www.laser.univ-montp1.fr/Cahiers/WPL060202.pdf
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Publisher 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: Université de Montpellier 1, Faculté des Sciences Economiques, LASER, Av. de la Mer - Espace Richter, CS 79606, 34960 Montpellier Cedex 2, France
Web page: http://www.laser.univ-montp1.fr
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Related research
Keywords: ELECTRICITY ; ENVIRONMENT ; REGULATION ; NETWORK ; UNIVERSAL SERVICE;

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Find related papers by JEL classification:
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

References listed on IDEAS
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  1. Chone, Philippe & Flochel, Laurent & Perrot, Anne, 2000. "Universal service obligations and competition," Information Economics and Policy, Elsevier, vol. 12(3), pages 249-259, September. [Downloadable!] (restricted)
  2. 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. [Downloadable!] (restricted)
  3. Greenwood, Jeremy & McAfee, R Preston, 1991. "Externalities and Asymmetric Information," The Quarterly Journal of Economics, MIT Press, vol. 106(1), pages 103-21, February. [Downloadable!] (restricted)
    Other versions:
  4. Armstrong, Mark & Doyle, Chris & Vickers, John, 1996. "The Access Pricing Problem: A Synthesis," Journal of Industrial Economics, Blackwell Publishing, vol. 44(2), pages 131-50, June. [Downloadable!] (restricted)
    Other versions:
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