Regulation

The New York Rev and the Distribution Company of the Future

2 Comments / Economics, Electricity, Regulation, Technology / By

We live in interesting times in the electricity industry. Vibrant technological dynamism, the very dynamism that has transformed how we work, play, and live, puts increasing pressure on the early-20th-century physical network, regulatory model, and resulting business model of the vertically-integrated distribution utility. While the utility “death spiral” rhetoric is overblown, these pressures are real. …

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Geoff Manne in Wired on Fcc Title Ii

2 Comments / Economics, Regulation, Technology, Telecom / By

Friend of Knowledge Problem Geoff Manne had a thorough opinion piece in Wired yesterday on the FCC’s Title II Internet designation. Well worth reading. From the “be careful what you wish for” department: Title II (which, recall, is the basis for the catch-all) applies to all “telecommunications services”—not just ISPs. Now, every time an internet …

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When Does State Utility Regulation Distort Costs?

Economics, Electricity, Energy markets, Politics, Regulation / By

I suspect the simplest answer to the title question is “always.” Maybe the answer depends on your definition of “distort,” but both the intended and generally expected consequences of state utility rate regulation has always been to push costs to be something other than what would naturally emerge in the absence of rate regulation. More …

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Weak Beer and Antitrust Economics

1 Comment / Economics, Food and wine, Regulation / By

Yesterday’s Wall Street Journal brought the story, “Bud Crowded Out by Craft Beer Craze.” While Bud Light is currently the highest selling beer in the United States, the flagship brand Budweiser is fading. The international beverage giant is scrambling to win over younger drinkers to boost Budweiser sales, so the familiar Clydesdale horses are out …

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Charging for Non-customer-specific Fixed Costs

1 Comment / Economics, Electricity, Regulation / By

UC Berkeley economist Severin Borenstein has a really, really great post at the Energy at Haas blog on utility fixed charges to recoup system fixed costs. If you want a primer on volumetric versus two-part pricing, this is a good one. After a very clear and cogent explanation and illustration of the differences among variable …

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Platform Economics and “Unscaling” the Electricity Industry

2 Comments / Economic history, Economics, Electricity, Regulation, Technology / By

A few weeks ago I mused over the question of whether there would ever be an Uber or AirBnB for the electricity grid. This question is a platform question — both Uber and AirBnB have business models in which they bring together two parties for mutual benefit, and the platform provider’s revenue stream can come …

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Why Does a Theory of Competition Matter for Electricity Regulation?

1 Comment / Economics, Electricity, Regulation / By

For the firms in regulated industries, for the regulators, for their customers, does the theory underlying the applied regulation matter? I think it matters a lot, even down in the real-world trenches of doing regulation, because regulation’s theoretical foundation influences what regulators and firms do and how they do it. Think about a traditional regulated …

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The Sharing Economy and the Electricity Industry

4 Comments / Economics, Electricity, Networks, Regulation, Technology / By

In a recent essay, the Rocky Mountain Institute’s Matthew Crosby asks “will there ever be an AirBnB or Uber for the electricity grid?” It’s a good question, a complicated question, and one that I have pondered myself a few times. He correctly identifies the characteristics of such platforms that have made them attractive and successful, …

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