N-1Report
10 passages
(Multeese) in its SRMC memorandum dated August 27, 2010. The changes were to include the revenue adjustment mechanisms of the Demand Side Management (DSM) Cost Recovery Rider (DCRR) and the Fuel Adjustment Mechanism (FAM) Actual Adjustment...
AI summary The document outlines a series of regulatory actions and recommendations related to the Short Run Marginal Cost (SRMC) test, including the inclusion of revenue adjustment mechanisms like the DSM Cost Recovery Rider (DCRR) and Fuel Adjustment Mechanism (FAM). The NSEB has directed NS Power to review and adjust the SRMC test approach, excluding certain rates and incorporating graphical representations of unit revenues.
EM&V Reports 2023 2024 % Variance TOU (Domestic) Daily Price Elasticity -0.458 -1.607 251% Inter-Period Substitution Price Elasticity -0.186 -0.105 -44% CPP (Domestic) Daily Price Elasticity -0.084 -0.017 -80% Inter-Period Substitution Pri...
AI summary The text presents a table showing price elasticity values for TOU and CPP domestic rates in 2023 and 2024, highlighting significant variance percentages. The discussion focuses on inter-period substitution price elasticities, which indicate customers' ability to shift load.
2 Between Unit Revenue and Marginal Cost Current Approch based on Long term Load Forecast Alternate Approach based on Daily Price Elasticities Annual Sales (MWh) Long-term Elasticity Inefficient Usage (MWh) Percent of Annual Sales Annual S...
AI summary The document compares two approaches to calculating unit revenue and marginal cost, focusing on residential time-of-use and critical peak pricing. It presents data on annual sales, elasticity, inefficient usage, and elasticity ratios for different periods and pricing structures.
cceptable justification for the failure, such as those described above, the rate should be raised to a level at which it passes the test. Figure 1.1 2025 Base Cost Rate Revenues with DSM and SCRR
AI summary The text discusses adjusting rates based on acceptable justifications for failure, emphasizing the need to raise rates to meet the SRMC test. It references a figure analyzing 2025 base cost rate revenues incorporating DSM and SCRR.
Figure 1.2 2025 Base Cost Rate Revenues with DSM, SCRR and 2025 FAM Amounts (Based on 2025 average annual marginal cost of 9.048 cents/kWh) Short Run Marginal Cost Test Inefficient Usage Estimate Sales Price Elasticity-of- Inefficient Usag...
AI summary Figure 1.2 presents 2025 base cost rate revenues with DSM, SCRR, and FAM amounts. It includes data on residential and small general usage, time-of-day pricing, and critical peak pricing, showing variations in costs and sales across different usage periods.
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. The text explains that residential consumers differ from commercial and industrial users in their response to price changes due to differing motivations and rate structures, and that consumers are expected to be more responsive to price changes over longer periods.
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 Restructuring in the electricity industry will influence demand and supply price elasticities through unbundled services, new rate structures, and market competition. Consumers may become more price-sensitive over time due to increased substitutes and information, though short-term effects may be limited. Existing competitive elements, like time-of-use pricing and surplus power markets, suggest elasticity changes may be moderated.
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 Studies on UK electricity market restructuring reveal inelastic demand post-restructuring, with short-run price elasticities ranging from -0.13 to -1.14 and long-run from -1.12 to -1.89. Wolfram (1995) found British generators charged prices above marginal costs but didn't exploit full demand inelasticity, while Lo et al. (1990) modeled time-of-day tariffs based on varying elasticity estimates.
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 affects supply elasticity, noting dependencies on R&D funding, market structure decisions, and unbundling of ancillary services from power plants. Must-run plants and PG&E's use of hydro for spinning reserve are highlighted as factors influencing supply responsiveness. Performance-based ratemaking is also mentioned as a potential driver.
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 analyzing supply and demand elasticities for fringe and dominant firms in spot markets under a Commission contract. The study aims to assess market power by evaluating demand elasticities of dominant firms. Results are expected in November 1996, with reference to Robert Grow's 1996 testimony on generation incentives.
N-2Report - Refiled
18 passages
urately reflect current consumer behaviour and substitutes reflective of the current Nova Scotia context. [2](#page-6-0) In its letter dated September 5, 2025 (M12350), The Board provided as follows: The 2024 Report cited a comparison of t...
AI summary The document discusses the price elasticity estimates from the Time Varying Pricing (TVP) Pilot and their comparison to the price elasticity used in the 2024 Load Forecast Report. The TVP pilot showed more elastic demand than the 2024 Load Forecast, which assumed inelastic demand. The 2024 Load Forecast did not adjust its model based on the TVP pilot results.
DATE FILED: June 5, 2026 Page 9 of 26 The SRMC test is designed to compare unit revenues and marginal costs measured in cents per kWh. The marginal cost, normally expressed in $ per MWh, has been converted to cents per kWh. 1 Δ q = q x pri...
AI summary The document discusses the SRMC test, which compares unit revenues and marginal costs in cents per kWh. It details the use of price elasticity, particularly the long-term elasticity factor of -0.15 for certain rate classes, and highlights the application of this factor in load forecasting and SRMC analysis.
EM&V Reports 2023 2024 % Variance TOU (Domestic) Daily Price Elasticity -0.458 -1.607 251% Inter-Period Substitution Price Elasticity -0.186 -0.105 -44% CPP (Domestic) Daily Price Elasticity -0.084 -0.017 -80% Inter-Period Substitution Pri...
AI summary The text presents a table showing price elasticity metrics for TOU (Domestic) and CPP (Domestic) programs in 2023 and 2024, highlighting significant variance percentages. It discusses inter-period substitution price elasticities, which indicate customers' ability to shift load from one period to another.
2 Between Unit Revenue and Marginal Cost Current Approch based on Long term Load Forecast Alternate Approach based on Daily Price Elasticities from TVP Pilot Annual Sales (MWh) Long-term Elasticity Inefficient Usage (MWh) Percent of Annual...
AI summary The document compares two approaches for determining unit revenue and marginal cost: the current approach based on long-term load forecasts and an alternate approach using daily price elasticities from a TVP pilot. The alternate approach shows significantly higher inefficiencies, particularly during on-peak and off-peak winter hours, suggesting a potential impact on demand-side management strategies.
-varying periods, since the average annual marginal cost reflects the costs in all hours, while the unit revenues are designed around specific time periods. DATE FILED: June 5, 2026 Page 23 of 26 M09777, Board Order, June 22, 2021 and M118...
AI summary The document discusses residential Time-of-Day (TOD) and Time-Varying Pricing (TVP) programs, emphasizing how their rates are designed to shift energy consumption to off-peak hours. It highlights the Short Run Marginal Cost (SRMC) test for these programs, noting that comparing average annual unit revenue to average marginal cost is not meaningful for specific time periods. The TVP Pilot Program includes CPP and TOU tariffs, with the MURB TOU rate approved in 2024. The GRLF tariff is also discussed, with its SRMC test results for 2025.
cceptable justification for the failure, such as those described above, the rate should be raised to a level at which it passes the test. Figure 1.1 2025 Base Cost Rate Revenues with DSM and SCRR
AI summary The text discusses adjusting rates to pass the SRMC test, referencing a figure that shows 2025 base cost rate revenues with DSM and SCRR considerations.
Figure 1.2 2025 Base Cost Rate Revenues with DSM, SCRR and 2025 FAM Amounts Short Run Marginal Cost Test Inefficient Usage Estimate Sales Price Elasticity-of- Inefficient Usage Distribution Line Losses as a % of Total Ave. Line Unit Revenu...
AI summary Figure 1.2 presents 2025 base cost rate revenues with considerations for DSM, SCRR, and FAM. It includes data on distribution line losses, sales price elasticity, and inefficient usage estimates for various residential classes and time-of-use pricing structures.
Estimates of the Price Elasticity in the Regulated Electricity Market Existing estimates of demand and supply elasticities are derived from consumer and producer behavior in a regulated electricity market. The prospect of unbundled electri...
AI summary The document discusses the estimation of price elasticity in the regulated electricity market, emphasizing the limitations of existing estimates as deregulation progresses. It highlights the importance of statistical methods, data quality, and the inclusion of relevant variables in modeling demand and supply functions. References to studies and tables illustrate the range of elasticity estimates.
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, showing varying responsiveness to price changes in the short- and long-run. The text explains that residential consumers differ from commercial and industrial users in their motivations and responses to price changes, with greater long-term responsiveness due to opportunities to adjust behavior and capital stock.
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 purchase unbundled services, potentially affecting 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 informed consumers and greater price sensitivity.
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 are likely more price-sensitive compared to those purchasing from the Western Power Exchange. It also highlights motivations for bilateral contracts, such as reduced price risk and specific power quality requirements, and suggests that increased bilateral contracting may enhance price elasticity of demand.
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 the marginal cost of supply, promoting efficiency and better cost alignment for customers. While TOU rates are used for large customers in California, residential adoption faces technological and economic barriers. Widespread implementation could increase demand elasticity and allow for technological innovations in energy management.
Satisfaction Worl.G and Bright Line Energy Smvey Analysis A 1996 survey by Satisfaction Works and Bright Line Energy (SW-BLE), "The Market for Electric Energy in California," provides additional information on customer characteristics. The...
AI summary A 1996 survey by Satisfaction Works and Bright Line Energy reveals that California commercial and industrial customers are sensitive to price changes but prioritize reliability and service quality. While price was ranked low, many customers would switch suppliers for small price reductions or enhanced services.
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, referencing studies by Wolfram (1995) and Lo, McDonald, and Le (1990). It highlights inelastic demand in the short run and more elastic demand in the long run, with price elasticities ranging from -0.1 to -1.89.
ELECTRICITY SUPPLY ELASTICITIES
AI summary The section discusses electricity supply elasticities, which refer to the responsiveness of electricity supply to changes in price or demand. This is a key consideration in energy planning and regulation, as it affects how the grid can adapt to fluctuations in consumption and generation.
Current Supply Elasticity Estimates Supply elasticities, per se, do not exist in a regulated retail electricity market. Prices are set beforehand in a regulatory proceeding, and utilities must supply all retail power demanded at the price...
AI summary In a regulated retail electricity market, supply elasticities do not exist because utilities must meet all demand at set prices. However, in wholesale markets, supply elasticities are present and influenced by factors like transmission constraints and hydro conditions. Fossil-fueled generation and hydropower play significant roles in determining supply elasticity.
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 restructuring of electricity markets could increase supply elasticity through options like demand-side bidding and transmission upgrades. However, initial supply elasticities may remain low due to 'must-run' power plants and local transmission constraints. Hydroelectric resources may be used for spinning reserve, affecting supply elasticity and influenced by performance-based ratemaking.
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 assess the supply elasticities of fringe firms and consider demand elasticities at the end user level to project market power.