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Article: Modeling electricity pricing in a deregulated generation industry: the potential for oligopoly pricing in a poolco.
- Article from:
- The Energy Journal
- Article date:
- July 1, 1998
- Author:
CopyrightCOPYRIGHT 1998 International Association for Energy Economics. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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INTRODUCTION
There is widespread belief among regulators and policy analysts that deregulation of the electricity generating industry will yield economies in the cost of power supply, relative to the previously regulated regime, as a result of the introduction of competition. While competition in electric markets promises to improve efficiency, there are well-recognized aspects of market behavior, especially in industries with a relatively small number of firms, that threaten to offset the benefits that would lower electricity prices. In particular, in the normal operation of markets, price can be well above the short-run marginal cost of production as a result of ...