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| Author: | Berry, S. |
| Title: | Stranded costs, access charges, and ramsey pricing in the U.S. electric utility industry |
| Journal: | Quarterly Review of Economics and Finance
2000 : WINTER, VOL. 40:4, p. 503-518 |
| Index terms: | ELECTRICITY INDUSTRY USA PRICING |
| Language: | eng |
| Abstract: | As a consequence of expected partial deregulation in the U.S. electric utility industry, "stranded costs" may be passed on to ratepayers. This paper applies Ramsey pricing to this issue, with particular emphasis on the "elasticity of exit". That class with the greater elasticity of exit will optimally have a larger unbundled access price mark-up. With inclusion of a one-time exit fee, the optimal access charge for every class is equal to the marginal cost of transmission and distribution. |
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