Electricity Prices In A Competitive Environment

Discusses the events that led to current initiatives to restructure the electric power industry, and the institutional and structural changes that will be required to support the competitive pricing of electricity. Describes the analysis assumptions and methodology. Compares electricity prices under regulation and prices under competition. Discusses the sensitivities of the results to key parameters in the analysis cases. Analyzes the cash flow implications of the new competitive prices for utilities. Extensive charts, tables and graphs.

Information on pricing electricity in a competitive environment, competitive electricity price projections, including average costs, marginal costs, time-of-use pricing, cost reductions and efficiency improvements due to competition, capital recovery, reserve margins, competitive marginal cost pricing of electricity and bankruptcy, and financial implications for a typical regional utility and for groups of utilities.

Electricity markets are being deregulated or face new regulatory frameworks. In such changing markets, new pricing strategies will need to consider such factors as cost, value of service and pricing by objective. Pricing in Competitive Electricity Markets introduces a new family of pricing concepts, methodologies, models, tools and databases focused on market-based pricing. This book reviews important theoretical pricing issues as well as practical pricing applications for changing electricity markets.

Electricity Pricing In Transition is written to address the new issues facing utilities, retailers, regulators, and customers in the changing electricity market. It is organized into five sections. Section I deals with the new restructured organization that has emerged from yesterday's vertically integrated, regulated monopoly company. Section II deals with issues in competitive pricing. Section III reviews the role of demand response and product design in today's chaotic marketplace. Given the single importance of California's energy crisis and the fact that it will be studied for years to come, Section IV is devoted to studying the lessons learned from this crisis. The final section of the book deals with markets and regulations. This book will provide practitioners with guidance on how to avoid the major pitfalls in pricing electricity while the market is in transition by drawing upon the insights and lessons learned from the experience of others that are documented in this book.

Critique of the US Electricity Industry. Analysis of derailed industry deregulation initiatives. Sketches a new, competitively structured Energy Policy Template.

The challenges currently facing particIpants m competitive electricity markets are unique and staggering: unprecedented price volatility, a crippling lack of historical market data on which to test new modeling approaches, and a continuously changing regulatory structure. Meeting these challenges will require the knowledge and experience of both the engineering and finance communities. Yet the two communities continue to largely ignore each other. The finance community believes that engineering models are too detailed and complex to be practically applicable in the fast changing market environment. Engineers counter that the finance models are merely statistical regressions, lacking the necessary structure to capture the true dynamic properties of complex power systems. While both views have merit, neither group has by themselves been able to produce effective tools for meeting industry challenges. The goal of this book is to convey the fundamental differences between electricity and other traded commodities, and the impact these differences have on valuation, hedging and operational decisions made by market participants. The optimization problems associated with these decisions are formulated in the context of the market realities of today's power industry, including a lack of liquidity on forward and options markets, limited availability of historical data, and constantly changing regulatory structures.

Intended for both lay & technical readers, this report serves as a basic reference tool that provides a comprehensive delineation of the electric power industry & its traditional structure, which has been based on its monopoly status. In addition, it describes the industry's transition to a competitive environment by providing a descriptive analysis of the factors that have contributed to the interest in a competitive market, proposed legislative & regulatory actions, & the steps being taken by the various components of the industry to meet the challenges of adapting to & prevailing in a competitive environment. Figures, tables, historical information.

After 2 decades, policymakers and regulators agree that electricity market reform, liberalization and privatization remains partly art. Moreover, the international experience suggests that in nearly all cases, initial market reform leads to unintended consequences or introduces new risks, which must be addressed in subsequent “reform of the reforms. Competitive Electricity Markets describes the evolution of the market reform process including a number of challenging issues such as infrastructure investment, resource adequacy, capacity and demand participation, market power, distributed generation, renewable energy and global climate change. Sequel to Electricity Market Reform: An International Perspective in the same series published in 2006 Contributions from renowned scholars and practitioners on significant electricity market design and implementation issues Covers timely topics on the evolution of electricity market liberalization worldwide