N-2Report - Refiled
5 passages
In all three customer classes, the table shows that short run demand is price-inelastic (a 1 percent decline in price will result in a less than 1 percent increase in consumption). More recent studies of short-run residential demand elasti...
AI summary The text discusses the price elasticity of electricity demand, noting that short-run demand is price-inelastic with estimates ranging from -0.20 to -0.27. It contrasts this with long-run elasticity, which is more responsive, and compares electricity demand elasticity to that of gasoline, highlighting similarities and differences in consumer response over time.
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.
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.
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 on California's electric energy market shows that while price is not the top priority for customers, reliability and service are highly valued. Many customers would switch suppliers for small price reductions, but prefer enhanced services over lower prices.
ormance-based rate. Even if the market prices fall below operation and maintenance costs, owners of "must-run" generation may have no incentive to reduce output or to cease operating the power plants. As a result of restructuring, the scop...
AI summary Restructuring in the electricity sector is expected to change market structures, introduce new financial instruments, and increase supply elasticities by reducing investor risks. However, due to high capital costs and long lead times, generation supply may remain inelastic unless prices rise significantly. Alternative responses, such as transmission upgrades and energy efficiency, may also emerge.