The price of electric power is perhaps the most visible criterion by which utility performance is judged. It is more obvious in the market than costs and it matters more to consumers. Those facts alone would justify attention to price and its determinants. In addition, while costs prove to be the most important influence on price, the relationship between costs and price is significantly affected by differences in ownership, competition, and other features of the market and the utility itself. For these reasons this chapter examines price and pricing behavior by electric utilities.
KeywordsMarginal Cost Price Determination Electric Utility Incentive Regulation Marginal Revenue
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