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DEREGULATING THE ELECTRIC UTILITY INDUSTRY

Roger E. Bohn

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Abstract

Deregulating the Electric Utility Industry Roger E. Bohn, Richard D. Tabors, Bennett W. Golub, Fred C. Schweppe Utility Systems Program MIT Energy Laboratory Many functions must be performed in any large electric power system. A specific proposal for a deregulated power system, based on a real-time spot energy marketplace, is presented and analyzed. A central T&D utility acts as a market maker, setting prices to equilibrate supply and demand. Decentralized competitive firms invest and operate in response to current and projected spot prices. The paper explicitly addresses the many practical engineering and economic functions and issues which must be taken into account by any proposal to deregulate electric power generation. It does not answer the question of whether deregulation is a

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What this paper is about

Deregulating the Electric Utility Industry Roger E. Bohn, Richard D. Tabors, Bennett W. Golub, Fred C. Schweppe Utility Systems Program MIT Energy Laboratory Many functions must be performed in any large electric power system. A specific proposal for a deregulated power system, based on a real-time spot energy marketplace, is presented and analyzed. A central T&D utility acts as a market maker, setting prices to equilibrate supply and demand. Decentralized competitive firms invest and operate in response to current and projected spot prices. The paper explicitly addresses the many practical engineering and economic functions and issues which must be taken into account by any proposal to deregulate electric power generation. It does not answer the question of whether deregulation is a

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Available abstract

Deregulating the Electric Utility Industry Roger E. Bohn, Richard D. Tabors, Bennett W. Golub, Fred C. Schweppe Utility Systems Program MIT Energy Laboratory Many functions must be performed in any large electric power system. A specific proposal for a deregulated power system, based on a real-time spot energy marketplace, is presented and analyzed. A central T&D utility acts as a market maker, setting prices to equilibrate supply and demand. Decentralized competitive firms invest and operate in response to current and projected spot prices. The paper explicitly addresses the many practical engineering and economic functions and issues which must be taken into account by any proposal to deregulate electric power generation. It does not answer the question of whether deregulation is a

Key concepts: Deregulation, Electric utility, Electric power industry, Electric energy, Electric power, Economics, Industrial organization, Power (physics)

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