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Market Failures in Real-Time Metering

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Abstract

Policies to promote real-time metering (RTM) require more than showing benefits from more timely responses to variations in cost. They require positive externalities to imply that too few meters would be installed through private transactions. RTM presents no systematic externalities when utilities must serve peak period users, and may present negative externalities under some conditions. Positive externalities are likely when electricity is rationed through blackouts. RTM may or may not increase welfare when peak period wholesale markets are not competitive; a prohibition on RTM might be appropriate in such situations even if metering itself were costless.

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Authors and Affiliations

  1. Baltimore County and Resources for the Future Department of Public Policy, UMBC, University of Maryland, 1000 Hilltop Circle, Baltimore, MD, 21250

    Timothy J. Brennan

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  1. Timothy J. Brennan
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Brennan, T.J. Market Failures in Real-Time Metering. Journal of Regulatory Economics 26, 119–139 (2004). https://doi.org/10.1023/B:REGE.0000038927.29819.0d

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  • DOI: https://doi.org/10.1023/B:REGE.0000038927.29819.0d

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