[BETA] Fortnightly

Curbing Market Power

or Power Markets?

In their article, "Curbing Market Power: The Larger the Better" (Apr. 15, 1996, p. 10), Christopher D. Seiple and Douglas M. Logan show that market-share indices can be derived from commercially available databases. The authors reference their soon-to-be-released study, U.S. Electric Utility Industry Mergers and Acquisitions, as a source for further market-power assessments.

The topic is timely. The U.S.

Low Loads, Short Ride

Kevin O'Donnell's article "Aggregating Municipal Loads: The Future is Today" (Oct. 1, 1995) argues that residential and small commercial low-load-factor customers will do well in a competitive environment. Yes, I agree that the future for these customers is definitely today. Low-load customers will do much better in the short run. As long as excess capacity exists, sellers will price at little more than short-run marginal cost. Once excess capacity dries up, however, fixed costs will have to be paid.

In his recent article, "Cost-of-Service Studies: Do They Really Tell Us Who's Subsidizing Who?" (Nov. 15, 1994), Mark Quinlan proposes an alternative cost-of-service methodology. He claims that under current cost-allocation methods (and given adequate capacity to meet demand) a rate class with increasing sales subsidizes a rate class with decreasing sales.