Accounting for network operators' heterogeneity is of crucial importance for regulators. In contrast to observed heterogeneity, the consideration of unobserved differences is far more challenging. Most estimation models try to account for unobserved factors that impact the network operators'...

This paper develops a dynamic model of competitive equilibrium in electricity markets with thermal, hydro and intermittent power sources. Thermal generators have positive and increasing costs and use a marketable input. Hydro generators use a free and uncertain input, but one that is storable....

In this paper, we use a comprehensive and unique data set of financial, technical and structural characteristics of German distribution network operators from 2011 to 2017 to estimate both the transient and persistent cost efficiency of German distribution network operators. In addition, we...

The informationally simple approach to incentive regulation applies mechanisms that translate the regulator's objective function into the firm's profit-maximizing objective. These mechanisms come in two forms, one based on subsidies/taxes, the other based on constraints/price caps. In spite of a...

In this paper we look at the relative merits of two capacity utilization regimes in the merchant electricity transmission network: Must offer (Mo) where the entire capacity installed is made available for transmission and Non Must Offer (NMo) where some capacity could be withheld. We look at two...

Scale characteristics are key properties of production functions that determine optimal firm sizes, and have considerable policy implications for sectors undergoing restructuring. However, estimates of scale characteristics typically vary with the assumptions of the underlying empirical model....

In 1999, Maryland chose to join several other coastal states in restructuring its electricity markets, in an effort to bring cheaper electricity into the state to supply heavy manufacturers who were considering relocating to places with cheaper supply. Initially, this policy change appeared...

Under what conditions does cost-of-service regulation lead firms to distort costs? This paper analyzes changes in fuel procurement practices by coal- and natural gas-fired electricity generating plants in the United States following state-level legislation that ended cost-of-service regulation...

Given the characteristics of electricity and the reforms that this sector has undergone, there is still a lot of discussion regarding the best way of ensuring adequate supply in such an environment. The situation is even more critical for countries like Colombia with high dependence on hydro...