Skip to main content

Electricity Transmission Pricing: How Contracts Must Reflect Costs

  • Chapter
Electricity Transmission Pricing and Technology
  • 78 Accesses

Abstract

This article sets out the main design elements of contracts for use of a transmission system and the basic methods of transmission pricing. It considers two methods of pricing transmission: “top-down” and “bottom-up”. The Federal Energy Regulatory Commission has recently established the principle that the terms and prices offered for transmission access must be comparable with those enjoyed by owners of the transmission system.1 Any comparison of terms must go beyond a simple consideration of the costs of building and maintaining lines. The following checklist of design characteristics is a starting point for making a comparison of the terms of access. Furthermore, as we have shown elsewhere, each method requires close links between prices for transmission and costs of generation. Attempts to set transmission prices without reflecting the appropriate costs of generation will distort incentives for efficient use and development of the transmission system.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Subscribe and save

Springer+ Basic
$34.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or eBook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 129.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 169.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 169.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Similar content being viewed by others

Endnotes

  1. FERC Docket RM93–19–000 (Oct. 26, 1994

    Google Scholar 

  2. Hunt and G. Shuttleworth, Operating a Transmission Company Under Open Access: The Basic Requirements, ELEC. J., March 1993, at 40.

    Google Scholar 

  3. See R. F. Boh, MC. Caramanis and F. C. Schweppe, Optimal Pricing in Electrical Networks over Space and Time, RAND J. OF ECON., Autumn 1984. For a summary, see S. Hunt and G. Shuttleworth, Electricity Transmission Pricing: the New Approach, UTILITIES POLICY, Mar. 1993.

    Google Scholar 

  4. See, e.g., W. Hogan, Electric Transmission: A New Model for Old Principles, ELEC. J., Mar. 1993.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 1996 Kluwer Academic Publishers

About this chapter

Cite this chapter

Shuttleworth, G. (1996). Electricity Transmission Pricing: How Contracts Must Reflect Costs. In: Einhorn, M., Siddiqi, R. (eds) Electricity Transmission Pricing and Technology. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-1804-7_6

Download citation

  • DOI: https://doi.org/10.1007/978-94-009-1804-7_6

  • Publisher Name: Springer, Dordrecht

  • Print ISBN: 978-94-010-7304-2

  • Online ISBN: 978-94-009-1804-7

  • eBook Packages: Springer Book Archive

Publish with us

Policies and ethics