Energy subsidies in California's electricity market deregulation

Ritschel, Alexander; Smestad, Greg P.

doi:10.1016/s0301-4215(02)00197-0

Cited by 21 publications

(17 citation statements)

References 11 publications

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“…While other researchers have examined California's electricity PGC program (Blumstein et al , Kushler et al , Ritschel & Smestad , Nadel & Kushler ), no studies have evaluated the program since it ended in 2011; the current research offers novel insight into program outcomes. This comprehensive analysis provides previously unknown information about California's PGC—and PBFs in general—to allow the authors to evaluate the mechanism as a possible tool for the water sector.…”

Section: Introductionmentioning

confidence: 85%

“…The administration and oversight of PIER has been cited as one of the main reasons the California Senate let the program expire. PIER was projected to have substantial economic benefits that exceeded program costs (Ritschel & Smestad ); however, according to the California Legislative Analyst's Office (LAO), the program had shortfalls, e.g., the CEC could not demonstrate that PIER‐sponsored research projects had tangibly benefited the ratepayers, the research scope was too broad, and the funded projects did not always meet the goals set by the statute (LAO ). Additionally, IOU contributions and distributions to and from the PIER program were sometimes geographically lopsided, with some money allocated to programs outside IOU service areas and sent instead to POU territories, other states, and even other countries (Kuduk & Anders ).…”

Section: Pgc Outcomesmentioning

confidence: 99%

“…In 1998, California became one of the first states to initiate a deregulated electricity market through the introduction of Assembly Bill (AB) 1890 (Ritschel & Smestad ). To prevent the state's electric utilities from reducing funds for public programs and research and development, part of the bill included establishing the PGC program to fund efforts previously funded by utility operating budgets (Nadel & Kushler ).…”

Section: Introductionmentioning

confidence: 99%

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Advancing Water Innovation Through Public Benefit Funds: Examining California's Approach for Electricity

Quesnel

Ajami²

2018

Journal AWWA

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This research reviews public benefit funds (PBFs), one potential policy instrument for future water investment. These mechanisms, usually supported by per-usage customer surcharges, are widely used to fund clean energy initiatives. This study reviews the existing literature on these tools and then takes a case study approach to investigate one specific PBF program-California's electricity public goods charge (PGC), used to finance energy efficiency, renewable energy, and energy research and development. The authors' analysis finds that customers, utilities, and the state benefited environmentally and economically from the PGC program. Following the electricity sector's lead, PBFs for water could be vital for strengthening public investment in water by creating a dedicated fund for programs and projects that enhance system resiliency, modernize infrastructure, improve network performance, and increase innovation in the water sector and beyond.

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Section: Introductionmentioning

confidence: 85%

Section: Pgc Outcomesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Advancing Water Innovation Through Public Benefit Funds: Examining California's Approach for Electricity

Quesnel

Ajami²

2018

Journal AWWA

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“…A defining characteristic of electricity is that, from a pricing perspective, it has no natural form with flow (kWh), stock (kW), load volatility and customer numbers all being legitimate pricing mechanisms (Boiteux, 1956;Boiteux & Stasi, 1952;Nelson & Orton, 2013;Simshauser, 2016;Keay, 2016). Accelerated depreciation 24 is also a potential mechanism along with supra-competitive prices (Martin, 2001), explicit surcharges (Beard et al 2003), return of capital only (Pierce, 1984) and securitised bond issues (Michaels, 1998;Pagach & Peace, 2000;Martin, 2001;Ritschel & Smestad 2003). 25 In the present exercise we have opted for the latter.…”

Section: Zero Recovery Not Crediblementioning

confidence: 99%

Regulated electricity networks, investment mistakes in retrospect and stranded assets under uncertainty

Simshauser

Akimov

2019

Energy Economics

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The run-up in the capital stock was driven by forecast demand growth and a tightening of reliability standards. But demand contracted from 2010-2015. With a rising RAB, contracting demand and a regulated revenue constraint, an adverse cycle of sharply rising tariffs and falling demand appeared to be emerging. Some networks were characterised by significant investment mistakes in retrospect, and perhaps unsurprisingly, various consumer groups and regulatory bodies argued assets should be stranded or written-off completely and network tariffs reduced. From 2015-2018, energy demand increased once again. In this article we present a method for dealing with stranded assets under uncertainty; rather than permanently stranding assets that fail a used and useful test, we reorganise the financial and economic affairs of a template network utility and "Park" excess capacity, issue credit-wrapped bonds to temporarily finance the stranded capital stock, then re-test the Parked Assets at the end of each five-year regulatory determination. Parked Assets can then be "Un-Parked" and returned-to-service in line with connections growth, load growth, or both. The most interesting result is the immediate reduction in network tariffs, and a more stable trajectory under our generalised assumptions. Cambridge Working Papers in Economics Faculty of Economics www.eprg.group.cam.ac.uk Regulated electricity networks, investment mistakes in retrospect and stranded assets under uncertainty EPRG Working Paper 1828

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“…In California, deregulation has led to a disaster, mainly because the market was more re-regulated than deregulated. Retail price regulation with producers' subsidy led to excessive consumers and inevitable supply shortages (Ritschel and Smestad, 2003). A study by the Government Accountability Office (Wells, 2005) stated that the restructuring effects on consumers have been mixed.…”

Section: Experiences From Competitive Electricity Markets Around the mentioning

confidence: 99%

Navigating Towards a Sustainable Electricity Supply in Indonesia

Sugianto

2014

MAS

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The realization that natural resources are limited has triggered a global sustainability movement, including in the electricity sector. Sustainable electricity supply is within the national agenda of many countries given that the demand for electricity has shown a consistent increase over many decades. An important aspect of sustainable electricity supply is the pricing of electricity. The objective of this study is to explore the effectiveness of a competitive electricity market structure in the Indonesian case. While restructuring, deregulation and privatization in the electricity industry is aimed at improving efficiency in electricity supply and ensuring competitive electricity price, experiences from other countries indicate that competitive market can lead to high price volatility and gaming behavior among market players, leading to more expensive electricity price. This study proposes to use an agent based model to simulate a competitive market. The focus of the study has been on the installed generation capacity in the region to ensure availability of supply and competitive pricing. The study features the Java-Bali grid and uses the half-hourly demand data from the region to observe the pricing dynamics.

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Energy subsidies in California's electricity market deregulation

Cited by 21 publications

References 11 publications

Advancing Water Innovation Through Public Benefit Funds: Examining California's Approach for Electricity

Advancing Water Innovation Through Public Benefit Funds: Examining California's Approach for Electricity

Regulated electricity networks, investment mistakes in retrospect and stranded assets under uncertainty

Navigating Towards a Sustainable Electricity Supply in Indonesia

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