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ID: 132654

On distributive effects of optimal regulation for power grid ex / Herrera, Luis Angel; Rosellon, Juan

Rosellon, Juan	Journal Article
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Publication

2014.

Summary/Abstract

To date, the distributive implications of incentive regulation on electricity transmission networks have not been explicitly studied in the literature. More specifically, the parameters that a regulator might use to achieve distributive efficiency under price-cap regulation have not yet been identified. To discern these parameters is the motivation for the research presented in this paper. We study how different weight parameters affect the distributive characteristics of optimal price-cap incentive regulation for electricity transmission. We find that a regulator×s use of ideal (Laspeyres) weights tends to be more beneficial for the Transco (consumers) than for consumers (the Transco).

Key Words

Incentive Regulation ; Electricity Transmission ; Cost Theory ; Regulation Policy ; Distributive Efficiency ; Electricity Transmission Networks - ETN ;
Price-Cap Regulation ; Optimal Regulation ; Power Grid Expansion

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ID: 114308

Transmission investment in the Peruvian electricity market: theory and applications / Ruiz, Erix; Rosellon, Juan

Ruiz, Erix	Journal Article
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Publication

2012.

Summary/Abstract

This research presents an application of the mechanism in Hogan et al. (2010) (HRV) to promote electricity transmission network expansion in the Peruvian electricity transmission system known as SEIN (Sistema Eléctrico Interconectado Nacional). The HRV mechanism combines the merchant and regulatory approaches to promote investment into transmission grids. This mechanism gives incentives for efficient investment in expansion of the network by rebalancing over time the fixed and variable charges of a two-part tariff in the framework of a wholesale electricity market with locational pricing. The expansion of the network is carried out through the sale of Financial Transmission Rights (FTRs) for the congested lines. The mechanism is applied for 103 nodes of the SEIN using detailed characteristics of generators, nodes and transmission lines. Under Laspeyres weights and linear cost of expansion of transmission capacity, it is shown that prices converge to lower price levels as a result of increased transmission capacity.

Key Words

Peru ; Incentive Regulation ; Electricity Transmission Expansion

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