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• W1966365587 abstract "Abstract Despite the strong empirical evidence of heterogeneous customer outage costs and the recent theoretical arguments for unbundling service reliability, retail electric service remains homogeneous and causes an externality in electricity consumption. This paper, by integrating this peculiar aspect of the retail electric service market into a traditional second-best pricing analysis, derives a set of optimal pricing rules for retail electric rate designs. Such rules are sufficiently general that they encompass Ramsey pricing and peak load pricing under demand uncertainty and consumption externality. We apply these rules to analyze the economic inefficiency due to a fully distributed cost pricing method adopted in 1983 by the California Public Utilities Commission. This economic inefficiency is likely to be over-consumption by customers with relatively low outage costs and small price responsiveness." @default.
• W1966365587 created "2016-06-24" @default.
• W1966365587 creator A5084194422 @default.
• W1966365587 date "1988-12-01" @default.
• W1966365587 modified "2023-10-02" @default.
• W1966365587 title "Optimal electricity rates and consumption externality" @default.
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• W1966365587 doi "https://doi.org/10.1016/0165-0572(88)90007-2" @default.
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