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| Author: | Borenstein, S. Bushnell, J. Stoft, S. |
| Title: | The competitive effects of transmission capacity in a deregulated electricity industry |
| Journal: | RAND Journal of Economics
2000 : SUMMER, VOL. 31:2, p. 294-325 |
| Index terms: | CAPACITY ELECTRICITY INDUSTRY COMPETITION |
| Language: | eng |
| Abstract: | In an unregulated electricity generation market, the capacity of transmission lines will determine the degree to which generators in different locations compete with one another. The authors show, however, that there may be no relationship between the effect of a transmission line in spurring competition and the actual electricity that flows on the line in equilibrium. They also demonstrate that limited transmission capacity can give a firm the incentive to restrict its output in order to congest transmission into its area of dominance. |
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