Severin Borenstein1, James Bushnell2, Frank A. Wolak3
1Haas School of Business, University of California, Berkeley, CA 94720, University of California Energy Institute, and NBER.
2University of California Energy Institute, 2539 Channing Way, Berkeley, CA 94720.
3Department of Economics, Stanford University, Stanford, CA 94305, and NBER.
Tóm tắt
We present a method for decomposing wholesale electricity payments into production costs, inframarginal competitive rents, and payments resulting from the exercise of market power. Using data from June 1998 to October 2000 in California, we find significant departures from competitive pricing during the high-demand summer months and near-competitive pricing during the lower-demand months of the first two years. In summer 2000, wholesale electricity expenditures were $8.98 billion up from $2.04 billion in summer 1999. We find that 21 percent of this increase was due to production costs, 20 percent to competitive rents, and 59 percent to market power.
