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Marginal Cost Pricing For Utilities: A Digest Of The California Experience

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  • ROGER L. CONKLING

Abstract

The California Public Utilities Commission (CPUC) has adopted the policy of using marginal costs as the basis for the pricing of regulated electric services (the “Marginal Cost Pricing Doctrine”). The record of actions taken by the CPUC to translate the doctrine into pragmatic pricing techniques spans 21 years from 1976, when the policy was adopted, to March 1997. Its pricing edicts for regulated electric rates of the three large California utilities—Pacific Gas and Electric Company (PG &E), Southern California Edison Company (SCE or Edison), and San Diego Gas & Electric Company (SDG &E)—are significant incursions into microeconomic price theory. (JEL D6, B4, N7)

Suggested Citation

  • Roger L. Conkling, 1999. "Marginal Cost Pricing For Utilities: A Digest Of The California Experience," Contemporary Economic Policy, Western Economic Association International, vol. 17(1), pages 20-32, January.
    • Handle: RePEc:bla:coecpo:v:17:y:1999:i:1:p:20-32
    DOI: 10.1111/j.1465-7287.1999.tb00660.x
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    Cited by:

    1. Keen, Steve, 2004. "Deregulator: Judgment Day for microeconomics," Utilities Policy, Elsevier, vol. 12(3), pages 109-125, September.

    More about this item

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services

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