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Common Carriage and the Pricing of Electricity Transmission

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  • Chris Doyle
  • Maria Maher

Abstract

The electric supply industry in Europe is increasingly under pressure to become more competitive. Deregulation and privatisation in the United Kingdom demonstrate the feasibility of this. Draft directives have already been agreed upon by the European Commission to open access in energy markets. We examine the relationship between generators, transmission networks and consumers within a full information static, short-run framework. We show that open access is desirable if accompanied by common carriage and competition in generation. Common carriage is a necessary but not a sufficient condition for efficient outcomes to emerge. We also discuss the pricing of transmission services under conditions of open access and competition in generation.

Suggested Citation

  • Chris Doyle & Maria Maher, 1992. "Common Carriage and the Pricing of Electricity Transmission," The Energy Journal, , vol. 13(3), pages 63-94, July.
    • Handle: RePEc:sae:enejou:v:13:y:1992:i:3:p:63-94
    DOI: 10.5547/ISSN0195-6574-EJ-Vol13-No3-4
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    References listed on IDEAS

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    1. Brown,Stephen J. & Sibley,David Sumner, 1986. "The Theory of Public Utility Pricing," Cambridge Books, Cambridge University Press, number 9780521314008, January.
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    3. John F. Stewart, 1979. "Plant Size, Plant Factor, and the Shape of the Average Cost Function in Electric Power Generation: A Nonhomogeneous Capital Approach," Bell Journal of Economics, The RAND Corporation, vol. 10(2), pages 549-565, Autumn.
    4. Paul L. Joskow, 1989. "Regulatory Failure, Regulatory Reform, and Structural Change in the Electrical Power Industry," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1989 Micr), pages 125-208.
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