Abstract
Given its natural monopoly status, electricity transmission is achieved at lowest cost with only one set of facilities. Nonetheless, joint ownership of these facilities has the potential to create a competitive environment and thereby contribute to efficiency in the supply of transmission services. Under a joint ownership structure, competition comes from competing marketers of output from a single set of facilities in which those marketers own shares of capacity. Furthermore, to prevent the owner-marketers from restricting capacity, a competitive joint venture (CJV) requires open entry into ownership—that is, anyone is allowed to become an owner by paying for expansion of capacity. Put simply, a CJV establishes competition in both the short-run and long-run supply of output.2
The views expressed are those of the author and do not necessarily reflect those of the Federal Trade Commission or of any individual commissioner.
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Braman, S.P. (1994). Competitive Joint Ventures and Electricity Transmission. In: Einhorn, M.A. (eds) From Regulation to Competition: New frontiers in electricity markets. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-1368-7_11
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DOI: https://doi.org/10.1007/978-94-011-1368-7_11
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