
Electricity Cost Modeling Calculations
Regulations, Technology, and the Role of Renewable Energy
- 2nd Edition - September 10, 2021
- Imprint: Academic Press
- Author: Monica Greer
- Language: English
- Hardback ISBN:9 7 8 - 0 - 1 2 - 8 2 1 3 6 5 - 0
- eBook ISBN:9 7 8 - 0 - 1 2 - 8 2 1 3 7 2 - 8
Reducing greenhouse gases and increasing the use of renewable energy continue to be critical goals for the power industry and electrical engineers to promote energy cost re… Read more

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Request a sales quoteReducing greenhouse gases and increasing the use of renewable energy continue to be critical goals for the power industry and electrical engineers to promote energy cost reductions. Engineers and researchers must keep up to date with the evolution of the power system sector, new energy regulations, and how different pricing techniques apply in today’s market. Electricity Cost Modeling Calculations, Second Edition delivers an updated view on pricing models, regulation, technology and the role renewable energy is starting to take in electricity. Starting with fundamental concepts relating to market structure, an increase in international regulations is added to expand the engineer’s knowledge. Cubic cost modeling and new modeling cases are included along with updated literature reviews for deeper research. The reference then extends into more advanced quantitative methods such as updated rate designs, and a new chapter is included on the marginal cost pricing of electricity in the United States with applications to reduce greenhouse gas emissions, making the reference relevant for today’s power markets. This book provides engineers with a practical guide on the latest techniques in electricity pricing and applications for today’s markets.
- Provides updates on international regulations and the role of renewable energy sources
- Presents foundational concepts and advanced quantitative aspects including updated practical case studies
- Discusses the appropriate rate/tariff structure for more efficient use of electricity and renewable options
Electrical engineers; electricity planners; electricity regulators; electrical engineering researcher
- Cover image
- Title page
- Table of Contents
- Copyright
- Preface
- Some Basic Economic Theory
- A New Regulatory Paradigm
- Chapter 1: Introduction
- Abstract
- 1.1: Introduction
- 1.2: “Going Green”
- 1.3: And Talking About “Going Green” …
- 1.4: And Speaking of Economics…
- 1.5: The Marginal-Cost Pricing Doctrine
- 1.6: A Brief Overview of the United States Electric Market
- 1.7: Internalizing the Cost of Reducing Carbon Emissions—The Marginal Social Cost
- 1.8: Optimal Rate/Tariff Design and Tax Credits to Promote Efficient Use of Energy and a Reduction in Carbon Emissions
- 1.9: Conclusion
- Chapter 2: The Sustainability of a (Natural) Monopoly
- Abstract
- 2.1: Defining Natural Monopoly
- 2.2: Economies of Scale
- 2.3: Examples
- 2.4: Economies of Scale Applied to the Electric Utility Industry
- 2.5: Literature Review—Economies of Scale in Generation
- 2.6: Economies of Scale and Density in Transmission and Distribution
- 2.7: Network Economies
- 2.8: For a Multiple-Output Natural Monopoly
- 2.9: Multiproduct Natural Monopoly
- 2.10: Ray Average Costs
- 2.11: Degree of Scale Economies
- 2.12: Product-Specific Economies of Scale
- 2.13: Economies of Scope
- 2.14: Subadditivity of the Cost Function
- 2.15: Trans-ray Convexity
- 2.16: Literature Review: Electricity as a Multiple-Output Industry and Related Concepts
- 2.17: Economies of Vertical Integration and Separability
- 2.18: Vertical Integration of Electric Utilities
- 2.19: Defining Vertical Integration
- 2.20: Relevant Literature Review—Vertical Integration and Separability
- 2.21: Bringing It All Together: Vertical and Horizontal Scope Economies in the Regulated U.S. Electric Power Industry (Journal of Industrial Economics, 2012); Global Scope Economies
- 2.22: Summary
- 2.23: The Sustainability of a (Natural) Monopoly
- 2.24: Arguments for Competition in the Electric Utility Industry—A Brief History and Literature Review
- 2.25: The Theory of Sustainability
- 2.26: Sustainability of Natural Monopoly—The Theory
- 2.27: ASIDE: Game Theory—A (Very) Brief Overview
- 2.28: On the Behavior of Costs for Sustainability of a Monopoly
- 2.29: The Theory of Contestable Markets: The Case of Electricity Markets
- 2.30: Real-World Examples of the Theory of Contestable Markets (TCMs): From Markets With High Entry Barriers to Competition
- 2.31: Conclusion
- Chapter 3: State Regulations, Policies, and Updates on States With Retail Choice
- Abstract
- 3.1: A History of Regulation in the U.S. Electric Utility Industry
- 3.2: Conclusion
- 3.3: Regulation at the State and Local Levels
- 3.4: Retail Choice Participation
- 3.5: Electricity Deregulation
- 3.6: Summary: Deregulation of the Electricity Industry—A Failed Experiment
- 3.7: Rate Making and Incentivizing Electricity Suppliers to Invest in Demand-Side Management and Energy Efficiency Programs
- 3.8: The Current Environment
- 3.9: Energy Efficiency Resource Standards
- 3.10: A Brief History of Energy Efficiency Resource Standards
- 3.11: The Future of the Electric Industry
- 3.12: Summary
- Appendix
- Chapter 4: The Economics (and Econometrics) of Cost Modeling
- Abstract
- 4.1: The General Cost Model
- 4.2: The Econometrics of Cost Modeling: An Overview
- 4.3: A Brief History of Cost Models and Applications to the Electric Industry
- 4.4: Appendix
- 4.5: Exercises
- Chapter 5: Case Study: Breaking Up Bells
- Abstract
- 5.1: Introduction
- 5.2: The Natural Monopoly Conundrum
- 5.3: Breaking Up Bell: The Case of AT&T
- 5.4: Economies of Vertical Integration: An Argument for Natural Monopoly?
- 5.5: Parallels Between Telephony and Electricity
- 5.6: Lessons to be Learned
- 5.7: Conclusion
- Chapter 6: Cost Modeling: Single- and Multiple-Output Specifications
- Abstract
- 6.1: The Determination of an Appropriate Objective Function: A Brief Overview of the Literature
- 6.2: Flexible Functional Forms
- 6.3: Multiproduct-Cost Models
- 6.4: Measures of Efficiency for Multiple-Output Models
- 6.5: Conclusion
- 6.6: End-of-Section Exercises: Multiple-Output Cost Models
- Appendix: Proofs
- Chapter 7: Case Study: Can Rural Electric Cooperatives Survive in a Restructured U.S. Electric Market? An Empirical Analysis
- Abstract
- 7.1: Introduction
- 7.2: Literature Review
- 7.3: Cost Models
- 7.4: Implications for Public Policy
- 7.5: Conclusion
- Chapter 8: Case Study: A Test of Vertical Economies for Nonvertically Integrated Firms: The Case of Rural Electric Cooperatives
- Abstract
- 8.1: Introduction
- 8.2: Background: Rural Electric Cooperatives
- 8.3: Reasons That Cooperatively Owned Electric Utilities Are Different
- 8.4: Literature Review
- 8.5: Data
- 8.6: Methodology
- 8.7: Preliminary Results—All Coops
- 8.8: Economies of Vertical Integration
- 8.9: Estimation Results
- 8.10: Tests for Vertical Integration
- 8.11: Conclusion
- 8.12: Update From the First Edition
- Chapter 9: Renewable Energy Sources and Policies
- Abstract
- 9.1: Introduction
- 9.2: Some History Here…
- 9.3: So, What Exactly Is “Distributed Generation”?
- 9.4: Rural Electric Cooperatives and Renewable Energy
- 9.5: Organizational Structure and Implications Thereof for Rural Electric Cooperatives
- 9.6: Regulatory Differences
- 9.7: Conclusion
- Chapter 10: The Theory of Efficient Prices
- Abstract
- 10.1: The Debate on the Optimal Pricing of Electricity
- 10.2: Rate Design
- 10.3: The Theory of Efficient Prices
- 10.4: Two-Part Tariffs
- 10.5: Multipart Tariffs
- 10.6: Time-of-Use Rates
- 10.7: Real-Time Pricing
- 10.8: Summary
- 10.9: Exercises
- 10.10: The Inefficiency of Average-Cost Pricing—Revisited
- 10.11: Electricity 101: The Economics of Generation Dispatch
- 10.12: The Efficient Pricing of Electricity: Marginal-Cost Pricing
- 10.13: Time-of-Use Rates: A Brief History
- 10.14: Update: Rate Plans for These Utilities
- 10.15: Recent Developments: Mandatory Time-of-Use Rates in California
- 10.16: Some Other Findings of Interest From Around the Globe
- 10.17: ASIDE: Real-Time Pricing—Do Customers Respond? Evidence From Illinois
- 10.18: Conclusion
- Index
- Edition: 2
- Published: September 10, 2021
- Imprint: Academic Press
- No. of pages: 422
- Language: English
- Hardback ISBN: 9780128213650
- eBook ISBN: 9780128213728
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