Electric Utilities: How Electricity is Priced

Document Type

Article

Department or Administrative Unit

Economics

Publication Date

Fall 2017

Abstract

College students taking economics courses usually realize that electricity is produced by a power plant and shipped over power lines. Yet they do not know how electricity is generated, how it is transmitted to business and household customers, and how it is priced. The purpose of this paper is to provide a primer on the electricity industry and, in particular, on how electricity is priced. The concepts discussed in this primer provide applications of concepts that students learn in principles of microeconomics, intermediate microeconomics, industrial organization, government and business, and managerial economics. The paper aims to make recent developments in electricity pricing accessible to a wide audience of readers and to provide them a timely and interesting application of applied microeconomics.

Comments

This article was originally published in The Journal of Energy and Development. The full-text article from the publisher can be found here.

Due to copyright restrictions, this article is not available for free download from ScholarWorks @ CWU.

Journal

The Journal of Energy and Development

Rights

Copyright © 2018 by the International Research Center for Energy and Economic Development (ICEED)

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