Pricing in Competitive Electricity Markets, A. Faruqui and K. Eakin, editors. Forward by J. Robert Malko.

Pricing in Competitive Electricity Markets, A. Faruqui and K. Eakin, editors. Forward by J.... Review of Industrial Organization 21: 329–333, 2002. © 2002 Kluwer Academic Publishers. Printed in the Netherlands. Book Review Pricing in Competitive Electricity Markets, A. Faruqui and K. Eakin, editors. For- ward by J. Robert Malko. Boston: Kluwer Academic Publishers, 2000, xxxiii, 450 pages. ISBN 0-7923-7839-3. Pricing in Competitive Electricity Markets examines two questions. First, what will the deregulated industry look like? Generation and retailing may be deregulated, but monopoly and regulation will remain for transmission and distribution. Second, what products will emerge in the new structure? Price competition on a homogen- eous good characterized by high fixed cost and low marginal cost means losses for all firms. Hence, product differentiation emerges, through pricing, power quality, or ancillary services. Authors from various backgrounds address these questions in 27 chapters over six sections. Section highlights and comments follow. Section I overviews deregulation and the emerging product differentiation. Retail competition focuses initially on price, resulting in widespread losses. Profit recovers with consolidation and product differentiation. The limited ability to differentiate electricity per se forces competition along other dimensions, the most immediate is price. This ranges from a guaranteed price (e.g., flat or time- of-use), where the energy provider bears the risk, to http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Pricing in Competitive Electricity Markets, A. Faruqui and K. Eakin, editors. Forward by J. Robert Malko.

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2002 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1023/A:1020471422261
Publisher site
See Article on Publisher Site

Abstract

Review of Industrial Organization 21: 329–333, 2002. © 2002 Kluwer Academic Publishers. Printed in the Netherlands. Book Review Pricing in Competitive Electricity Markets, A. Faruqui and K. Eakin, editors. For- ward by J. Robert Malko. Boston: Kluwer Academic Publishers, 2000, xxxiii, 450 pages. ISBN 0-7923-7839-3. Pricing in Competitive Electricity Markets examines two questions. First, what will the deregulated industry look like? Generation and retailing may be deregulated, but monopoly and regulation will remain for transmission and distribution. Second, what products will emerge in the new structure? Price competition on a homogen- eous good characterized by high fixed cost and low marginal cost means losses for all firms. Hence, product differentiation emerges, through pricing, power quality, or ancillary services. Authors from various backgrounds address these questions in 27 chapters over six sections. Section highlights and comments follow. Section I overviews deregulation and the emerging product differentiation. Retail competition focuses initially on price, resulting in widespread losses. Profit recovers with consolidation and product differentiation. The limited ability to differentiate electricity per se forces competition along other dimensions, the most immediate is price. This ranges from a guaranteed price (e.g., flat or time- of-use), where the energy provider bears the risk, to

Journal

Review of Industrial OrganizationSpringer Journals

Published: Oct 13, 2004

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