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Capacity Rationing and Fixed Cost Collection

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  • Chi-Keung Woo

Abstract

This paper proposes a simple load management program with a two-part tariff to ration an electric utility’s installed capacity and to collect its fixed costs under asymmetric information and demand uncertainty. Because of its simplicity, the program is a practical alternative to spot pricing and rationing schemes with highly nonlinear rate structures.

Suggested Citation

  • Chi-Keung Woo, 1991. "Capacity Rationing and Fixed Cost Collection," The Energy Journal, , vol. 12(2), pages 153-164, April.
    • Handle: RePEc:sae:enejou:v:12:y:1991:i:2:p:153-164
    DOI: 10.5547/ISSN0195-6574-EJ-Vol12-No2-9
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    References listed on IDEAS

    as
    1. Marchand, M. G., 1974. "Pricing power supplied on an interruptible basis," European Economic Review, Elsevier, vol. 5(3), pages 263-274.
    2. Daniel F. Spulber, 1989. "Regulation and Markets," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262192756, December.
    3. Schwarz, Peter M & Taylor, Thomas N, 1987. "Public Utility Pricing under Risk; the Case of Self-Rationing: Comment and Extension," American Economic Review, American Economic Association, vol. 77(4), pages 734-739, September.
    Full references (including those not matched with items on IDEAS)

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