N-1Report
13 passages
M05002, NSUARB-NSPI P 878, NSUARB Order, August 1, 2003. DATE FILED: June 27, 2025 Page 3 of 20 (Multeese) in its SRMC memorandum dated August 27, 2010. The changes were to include the revenue adjustment mechanisms of the Demand Side Manag...
AI summary The document outlines a series of regulatory actions and decisions by the Nova Scotia Energy Board (NSEB) regarding the Short Run Marginal Cost (SRMC) test, including the inclusion of revenue adjustment mechanisms, the exclusion of specific rates, and the analysis of price elasticities. NS Power has been directed to continue monitoring and reporting on SRMC tests and to ensure that models reflect current consumer behavior.
2.0 METHODOLOGY The SRMC test involves the following steps: Determine the average marginal cost (over 8784 hours in 2024) at the transmission delivery level. In calculating this marginal cost, the effects of exports and load served under t...
AI summary The SRMC test calculates average marginal costs and compares them to unit revenues to assess efficiency. It accounts for distribution losses, uses price elasticity estimates, and applies different values for various rate classes. The test uses data from the 2024 Load Forecast Report and a California Energy Commission report.
Figure 1.1 2024 Base Cost Rate Revenues with DSM _ . N4 o- · - S hort Run Marginal Cost Tes st Ine efficient Usage I Estimat е Distributi on Line Losses as a % of Total Ave. Line Unit Revenue net of Base Charge in cents per MC in cents per...
AI summary The table in Figure 1.1 outlines 2024 base cost rate revenues with Demand Side Management (DSM) across various residential classes, including line losses, unit revenue, marginal costs, and usage estimates. It highlights significant variances in cost and usage patterns for different time-of-day and seasonal rate structures.
Table 1 Estimates of Electricity Price Elasticities Elasticity Estimates Short-run Long-run Residential -0.06 to -0.49 -0.45 to -1.89 Commercial -0.17 to -0.25 -1.00 to -1.60 Industrial -0.04 to -0.22 -0.51 to -{82 ) '- ,/ Most analysts ei...
AI summary The table presents estimates of electricity price elasticities for residential, commercial, and industrial consumers in the short-run and long-run. Residential consumers are noted to have different motivations and responses to price changes compared to industrial and commercial users, with greater responsiveness over longer periods due to opportunities for behavioral and capital stock adjustments.
CHANGES IN DEMAND ELASTICITIES DUE TO RESTRUCTURING As restructuring proceeds, more and more customers will purchase unbundled services. These will include differentiated products such as different levels of service quality and ancillary s...
AI summary As restructuring in the electricity industry progresses, more customers will have access to unbundled services and new market participants, which may affect the price elasticity of demand and supply. In the short run, consumer behavior may not change significantly, but long-term restructuring could lead to a more competitive market with greater consumer sensitivity to price changes.
Competing Suppliers The act of establishing competing suppliers (more substitutes) will increase the price elasticity of demand faced by individual generation companies (so long as transmission is inexpensive and open access prevails), tho...
AI summary Establishing competing suppliers increases the price elasticity of demand for individual generation companies, though the effect on overall market demand elasticity is uncertain. Market forces may encourage more substitutes, such as self-generation and distributed generation, particularly for large industrial customers.
Bilateral Contracting The behavior of buyers relying on bilateral contracts is likely to differ from consumers purchasing power from Western Power Exchange (WEPEX). Intuition suggests that buyers in bilateral contracts are probably more se...
AI summary This section discusses the behavior of buyers using bilateral contracts, noting that they may be more price-sensitive and motivated by factors like reduced price risk or specific power quality requirements. Increased bilateral contracting could lead to higher price elasticity of demand, though the future market share of such contracts is uncertain.
Unbundling of Electricity Unbundling electricity into distinct commodities such as energy, reliability or spinning reserve, quality, such as voltage control delivery to customers, could have some interesting effects with respect to the pri...
AI summary Unbundling electricity into distinct commodities like energy, reliability, and quality may affect price elasticity of demand. Ancillary services may have smaller fees, leading to inelastic demand, but unbundling could increase elasticity by offering more substitutes. Industrial and commercial users may face different cost structures, while consumers gain more options, potentially increasing sensitivity to price.
Time of Use Rates Time-of-use (TOU) rates, where t e kilowatt hour ·charge depends on whether the customer's load is at 3 am or 3 pm, permit prices to be aligned more closely with the marginal cost of supplying electricity. Increased use o...
AI summary Time-of-use (TOU) rates align electricity prices with marginal costs, promoting efficiency and better cost alignment for customers. While TOU rates are widely used for large customers in California, residential adoption is limited due to high transaction costs and technological barriers. Increased use of TOU rates could improve demand elasticity and encourage technological innovations in energy management.
Restructuring Experience in Other Countries Studies of other countries that have deregulated electricity provide information on demand elasticity after restructuring. In Wolfram's (1995) study of market power in the British electricity spo...
AI summary This section discusses demand elasticity in the British electricity market post-restructuring, citing studies by Wolfram (1995) and Lo, McDonald, and Le (1990). It notes that demand was inelastic in the short run but more elastic in the long run, with price elasticities ranging from -0.1 to -1.89.
aller supply options. This should increase the price elasticity of electricity supplies. The extent of such options will depend on the future funding of financing electricity research and development. Future supply elasticity is dependent...
AI summary The text discusses how restructuring in electricity markets may affect supply elasticities. It highlights that future supply elasticity depends on market structure decisions, including the unbundling of ancillary services and the role of hydroelectric resources for spinning reserve. These factors could influence how responsive supply is to price changes.
Research on Elasticities The University of California Energy Institute (UCEI) is currently doing a market power analysis under contract with the Commission 10 which uses estimates of demand and supply elasticities. UCEI will analyze the fr...
AI summary The University of California Energy Institute is conducting a market power analysis for the Commission, focusing on demand and supply elasticities. The study will examine fringe firms in spot markets and consider demand elasticities for dominant firms to assess market power. Results are expected in November 1996.
Witness Qualifications for LIONEL LERNER I am currently (since December 1, 1994) an Electric Generation System Program Specialist I. Previously, I developed assumptions and methods for the capacity expansion and demand conformance processe...
AI summary Lionel Lerner is an expert in electricity restructuring, market power analysis, and federal legislation affecting the electricity industry. He has experience in capacity expansion, demand conformance, and socioeconomic analyses for conservation programs. He holds a Ph.D. in Political Economy and an M.A. in Economics.
N-2Report - Refiled
8 passages
DATE REFILED: August 15, 2025 Page 6 of 20 NS Power utilized price elasticity of -0.15 applied in its SAE load forecast model from the 2024 Load Forecast Report (M11689) for the Domestic, Small General, and General rate classes. For all ot...
AI summary NS Power uses price elasticity estimates from its 2024 Load Forecast Report and a California Energy Commission report to model inefficient usage in different rate classes. A formula is provided to calculate estimated inefficient usage based on price elasticity, unit revenue, and marginal costs. The elasticity value of -0.15 was found reasonable for modeling impacts of price on energy sales. In 2024, no inefficiency occurred as unit revenue was above marginal cost.
Figure 1.2 2024 Base Cost Rate Revenues with DSM and 2024 FAM Amounts (Based o n 2024 ave rage annual ma arginal cost of 1 8.122 cents /KVVN) Short Ru n Marginal Co Ineff icient l Jsage E stimate l Sales rice Elasticity-of- Demand Range nt...
AI summary Figure 1.2 presents 2024 base cost rate revenues with DSM and FAM amounts, showing various residential rate classes, line losses, unit revenues, marginal costs, and usage estimates. It highlights significant variances in revenue and usage across different time-of-use and demand categories.
Table 1 Estimates of Electricity Price Elasticities Elasticity Estimates Short-run Long-run Residential -0.06 to -0.49 -0.45 to -1.89 Commercial -0.17 to -0.25 -1.00 to -1.60 Industrial -0.04 to -0.22 -0.51 to -{82 ) '- ,/ Most analysts ei...
AI summary Table 1 presents estimates of electricity price elasticities for residential, commercial, and industrial consumers in the short and long run. Residential consumers are expected to be more responsive to price changes over time due to differences in motivation and rate structures compared to industrial and commercial users.
ve to changes in electricity prices, compared to the U.S. in general. This conjecture is plausible, given modest space Autoregressive Model," Resource and Energy Economics, v. 16, p. 255-263, 1994. In economic analysis, the short run and l...
AI summary The text discusses the distinction between short-run and long-run responses in economic analysis, particularly in the context of electricity and energy demand. It references studies on gasoline demand and energy efficiency programs in California, highlighting how consumer behavior changes over time and the impact of efficiency initiatives.
CHANGES IN DEMAND ELASTICITIES DUE TO RESTRUCTURING As restructuring proceeds, more and more customers will purchase unbundled services. These will include differentiated products such as different levels of service quality and ancillary s...
AI summary As restructuring progresses, more customers will have access to unbundled services and new market participants, potentially affecting price elasticity of demand and supply. In the short run, consumer behavior may not change much, but in the long run, a competitive market could make consumers more price-sensitive. Some elements of a competitive market already exist in the regulated market.
Bilateral Contracting The behavior of buyers relying on bilateral contracts is likely to differ from consumers purchasing power from Western Power Exchange (WEPEX). Intuition suggests that buyers in bilateral contracts are probably more se...
AI summary The text discusses the behavior of buyers using bilateral contracts, noting they may be more price-sensitive and motivated by factors like reduced price risk or specific power quality needs. Increased bilateral contracting could enhance price elasticity of demand, though the extent of market growth is uncertain.
Time of Use Rates Time-of-use (TOU) rates, where t e kilowatt hour ·charge depends on whether the customer's load is at 3 am or 3 pm, permit prices to be aligned more closely with the marginal cost of supplying electricity. Increased use o...
AI summary Time-of-use (TOU) rates align electricity prices with marginal costs, potentially increasing efficiency and matching customer benefits with service costs. While TOU rates are used for large customers in California, they are not widely implemented for residential customers due to high transaction costs. Technological advancements may reduce these costs and increase demand elasticity.
Research on Elasticities The University of California Energy Institute (UCEI) is currently doing a market power analysis under contract with the Commission 10 which uses estimates of demand and supply elasticities. UCEI will analyze the fr...
AI summary The University of California Energy Institute (UCEI) is conducting a market power analysis for the Commission, focusing on demand and supply elasticities. The study will examine fringe firms' supply elasticities in spot markets and consider demand elasticities for dominant firms to assess market power. Results are expected in November 1996.