Protecting Electricity Retailers Against Price Volatility : The Electricity Tariff Equalization Fund in New South Wales
Most commentators agree that the benefits of competitive electricity markets will materialize only if wholesale prices are allowed to fluctuate more or less freely so as to provide adequate pricing signals to generators. Most also agree, however, t...
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| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/05/9612185/protecting-electricity-retailers-against-price-volatility-electricity-tariff-equalization-fund-new-south-wales http://hdl.handle.net/10986/10610 |
| Summary: | Most commentators agree that the
benefits of competitive electricity markets will materialize
only if wholesale prices are allowed to fluctuate more or
less freely so as to provide adequate pricing signals to
generators. Most also agree, however, that small electricity
users need to be protected against wholesale price
volatility through stable, predictable retail rates. That
raises a difficult question about whether the retailers or
distributors, caught in the middle, also need some
protection, especially early in the development of
competitive markets. The Australian state of New South Wales
has used a transitional mechanism to provide such
protection. Lessons learned from this experience can be of
interest for other countries. |
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