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Journal ArticleDOI

DSM shareholder incentives: recent designs and economic theory

01 Mar 1998-Utilities Policy (Pergamon)-Vol. 7, Iss: 1, pp 47-62
TL;DR: In this paper, a review of DSM shareholder incentive designs and earnings for 10 U.S. utilities is presented, and five specific recommendations are made: (1) apply shared-savings incentives to DSM resource programs (2) use markup incentives for individual programs only when net benefits are difficult to measure, but are known to be positive (3) set expected incentive payments based on covering a utility's hidden costs, which include some transitional management and risk-adjusted opportunity costs (4) use higher marginal incentives rates than are currently found in practice, but limit total incentive payments by
About: This article is published in Utilities Policy.The article was published on 1998-03-01. It has received 25 citations till now. The article focuses on the topics: Incentive & Shareholder.
Citations
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Journal ArticleDOI
TL;DR: In this paper, three scenarios are defined, which present different EV charging alternatives, in terms of charging power and charging station ownership and accessibility, and a case study is presented for each scenario and the required charging station usage to have a profitable business model is calculated.

158 citations


Cites background from "DSM shareholder incentives: recent ..."

  • ...The economic and regulatory implications of this kind of complex environments have been analysed for different fields of the energy sector, in particular regarding energy efficiency programmes (Abrardi and Cambini, 2015; Eto et al., 1998; Hannon et al., 2013)....

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  • ...If the regulator has perfect information about stakeholders’ costs and benefits, the task of regulation design becomes easy, but this is not common in existing markets (Eto et al., 1998; Stoft and Gilbert, 1994) and even less in brand new environments as electro-mobility is....

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Journal ArticleDOI
TL;DR: In this paper, the authors present a quantitative analysis of air pollution impacts on human health, damages from greenhouse gas emissions, and the avoided health costs from electrification, as well as discussing other impacts qualitatively.

144 citations

Dissertation
01 Jan 2006
TL;DR: In this paper, the authors introduce the introduction to energy, sustainable development, and climate change in the United Kingdom, and present a survey of existing technologies and their applications in this area.
Abstract: VI ACKNOWLEDGEMENTS VIII ABBREVIATIONS, ACRONYMS AND UNITS X PART I: INTRODUCTION TO ENERGY, SUSTAINABLE DEVELOPMENT AND CLIMATE CHANGE 1

106 citations

Journal ArticleDOI
01 Dec 2002-Energy
TL;DR: In this article, the economics of energy efficiency for the urban poor from the perspective of society, utilities and poor consumers, using five example programmes, are examined, and the policy options for overcoming the significant barriers to energy efficiency, and ways government can bridge the gap between what is good for society and what are good for the electricity industry.

54 citations

ReportDOI
19 Sep 2014
TL;DR: Satchwell et al. as mentioned in this paper proposed Satchwell, Andrew; Mills, Andrew, Barbose, Galen; Wiser, Ryan; Cappers, Peter; Darghouth, Naim
Abstract: Author(s): Satchwell, Andrew; Mills, Andrew; Barbose, Galen; Wiser, Ryan; Cappers, Peter; Darghouth, Naim

38 citations

References
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Journal ArticleDOI
TL;DR: A Theory of Incentives in Procurement and Regulation (TIIN) as mentioned in this paper is a popular textbook for regulatory economics, with a particular focus on the regulation of natural monopolies such as military contractors, utility companies and transportation authorities.
Abstract: More then just a textbook, A Theory of Incentives in Procurement and Regulation will guide economists' research on regulation for years to come. It makes a difficult and large literature of the new regulatory economics accessible to the average graduate student, while offering insights into the theoretical ideas and stratagems not available elsewhere. Based on their pathbreaking work in the application of principal-agent theory to questions of regulation, Laffont and Tirole develop a synthetic approach, with a particular, though not exclusive, focus on the regulation of natural monopolies such as military contractors, utility companies, and transportation authorities. The book's clear and logical organization begins with an introduction that summarizes regulatory practices, recounts the history of thought that led to the emergence of the new regulatory economics, sets up the basic structure of the model, and previews the economic questions tackled in the next seventeen chapters. The structure of the model developed in the introductory chapter remains the same throughout subsequent chapters, ensuring both stability and consistency. The concluding chapter discusses important areas for future work in regulatory economics. Each chapter opens with a discussion of the economic issues, an informal description of the applicable model, and an overview of the results and intuition. It then develops the formal analysis, including sufficient explanations for those with little training in information economics or game theory. Bibliographic notes provide a historical perspective of developments in the area and a description of complementary research. Detailed proofs are given of all major conclusions, making the book valuable as a source of modern research techniques. There is a large set of review problems at the end of the book.

3,619 citations

Book
01 Jan 1993
TL;DR: A Theory of Incentives in Procurement and Regulation (TIIN) as mentioned in this paper is a popular textbook for regulatory economics, with a particular focus on the regulation of natural monopolies such as military contractors, utility companies and transportation authorities.
Abstract: More then just a textbook, A Theory of Incentives in Procurement and Regulation will guide economists' research on regulation for years to come. It makes a difficult and large literature of the new regulatory economics accessible to the average graduate student, while offering insights into the theoretical ideas and stratagems not available elsewhere. Based on their pathbreaking work in the application of principal-agent theory to questions of regulation, Laffont and Tirole develop a synthetic approach, with a particular, though not exclusive, focus on the regulation of natural monopolies such as military contractors, utility companies, and transportation authorities. The book's clear and logical organization begins with an introduction that summarizes regulatory practices, recounts the history of thought that led to the emergence of the new regulatory economics, sets up the basic structure of the model, and previews the economic questions tackled in the next seventeen chapters. The structure of the model developed in the introductory chapter remains the same throughout subsequent chapters, ensuring both stability and consistency. The concluding chapter discusses important areas for future work in regulatory economics. Each chapter opens with a discussion of the economic issues, an informal description of the applicable model, and an overview of the results and intuition. It then develops the formal analysis, including sufficient explanations for those with little training in information economics or game theory. Bibliographic notes provide a historical perspective of developments in the area and a description of complementary research. Detailed proofs are given of all major conclusions, making the book valuable as a source of modern research techniques. There is a large set of review problems at the end of the book.

3,602 citations


"DSM shareholder incentives: recent ..." refers methods in this paper

  • ...The economic theory of incentives has been developed using the principal-agent model (see, for example, Laffont and Tirole, 1993)....

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Journal ArticleDOI
TL;DR: In this paper, a new institutional arrangement for regulating utilities is suggested that minimizes the costs of natural monopolies, a mixture of regulation and franchising, the plan draws on the advantages of each and eliminates many of the problems.
Abstract: A new institutional arrangement for regulating utilities is suggested that minimizes the costs of natural monopolies. A mixture of regulation and franchising, the plan draws on the advantages of each and eliminates many of the problems. The proposal allows utilities to set their own price on the basis of demand and marginal-cost projections. Subsidies are provided by the regulatory agency if there is a consumer surplus. The system encourages the utility to select a competitive price and to produce only the amount of service needed. Operating efficiency is encouraged by rewarding cost reductions and discouraging cost overstatement at the rate review. The regulatory agency would not need to take action to bring price and marginal costs into equality. The franchise sale can be made by competitive bidding, in which the bidders would capitalize part or all of the subsidy or the regulatory agency could recover the subsidy in a lump-sum tax on the utility.

391 citations

Book
01 Sep 1990
TL;DR: The Pace Study as mentioned in this paper is becoming a landmark for the measurement of environmental costs for the generation of electricity and it will be a reference concerned with measuring and incorporating the environmental damages into utility ratemaking.
Abstract: The so-called Pace Study' (Pace University Center for Environmental Legal Studies) is becoming a landmark for the measurement of environmental costs for the generation of electricity It will be a reference concerned with measuring and incorporating the environmental damages into utility ratemaking There are several reasons for this The first is conceptual Rather than associating the environmental costs with the clean-up costs, it addresses the damage function of various emissions resulting from electric generation by type of generation Second, it presents damage cost estimates Additionally, it will serve as a reference concerning calculations of environmental damage by type of generation in a variety of settings Sponsored by the New York State Energy Research and Development Authority and the US Department of Energy, it serves as an extensive review of the literature on the subject The authors present the material in an easy-to-reference manner according to, first, emissions source, and then by generation source The authors recognize the need for further research and, apparently, the size of the task They state simply, the report is intended to assist utilities, government regulators, legislators, policy analysts and public interest groups in estimating the costs of the environmental impacts of pollutants It will domore » that« less

275 citations


Additional excerpts

  • ...8 See, for example, Ottinger et al. (1990)....

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Posted Content
TL;DR: Train this paper provides a unified, modern, and nontechnical treatment of the field of optimal regulation, including models for regulating optimal output, tariffs, and surplus subsidy schemes, and presents all of the material graphically, with clear explanations of often highly technical topics.
Abstract: Optimal Regulation addresses the central issue of regulatory economics - how to regulate firms in a way that induces them to produce and price "optimally." It synthesizes the major findings of an extensive theoretical literature on what constitutes optimality in various situations and which regulatory mechanisms can be used to achieve it. It is the first text to provide a unified, modern, and nontechnical treatment of the field. The book includes models for regulating optimal output, tariffs, and surplus subsidy schemes, and presents all of the material graphically, with clear explanations of often highly technical topics. Kenneth E. Train is Associate Adjunct Professor in the Department of Economics and Graduate School of Public Policy at the University of California, Berkeley. He is also Principal of the firm Cambridge Systematics. Topics include: The cost structure of natural monopoly (economies of scale and scope). Characterization of first and second-best optimality. Surplus subsidy schemes for attaining first-best optimality. Ramsey prices and the Vogelsang-Finsinger mechanism for attaining them. Time-ofuse (TOU) prices and Riordan's mechanisms for attaining the optimal TOU prices' Multipart and self-selecting tariffs, and Sibley's method for using self-selecting tariffs to achieve optimality. The Averch-Johnson model of how rate-of-return regulation induces inefficiencies. Analysis of regulation based on the firm's return on Output, costs, or sales. Price-cap regulation. Regulatory treatment of uncertainty and its impact on the firm's behavior. Methods of attaining optimality without direct regulation (contestability, auctioning the monopoly franchise).

247 citations


"DSM shareholder incentives: recent ..." refers background or methods in this paper

  • ...Markups can be appropriate when the regulator is able to make an unbiased estimate of the net benefits of certain DSM programs, but is unable to verify the esti- 9 See, for example, Herman (1994), Braithwait and Caves (1994), and Hobbs (1991)....

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  • ...15 See Train (1991), for a good discussion of the Averch-Johnson effect....

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  • ...2 See Eto et al. (1997) for a discussion of decoupling....

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  • ...1 See also Nadel and Jordan (1992) for additional approaches to examining the relationship between shareholder incentives and various measures of DSM program size....

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  • ...8 See, for example, Ottinger et al. (1990)....

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