Alfred E. Kahn

Uniform Pricing or Pay-as-Bid Pricing: A Dilemma for California and Beyond

Any belief that a shift from uniform to as-bid pricing would provide power purchasers substantial relief from soaring prices is simply mistaken. The immediate consequence of its introduction would be a radical change in bidding behavior that would introduce new inefficiencies, weaken competition in new generation, and impede expansion of capacity.

The Deregulatory Tar Baby: The Precarious Balance Between Regulation and Deregulation, 1970-2000 and Henceforward

The recent history of the airline, telecommunications and electric utility industries years amply demonstrates the benefits of deregulation. It also demonstrates both the necessity of continued government involvement and its pitfalls. Prominent among the former are the efficient provision and pricing of infrastructure services, enforcement of antitrust-like policies and regulation of bottleneck facilities. The latter come down to an inherent tendency of regulators to engage in continued micromanagement—to continue to assume responsibility not merely for opening the door to competition but for ensuring that competitors go through it, and to prescribe the results they think an efficient competitive process would produce.

An economically rational approach to least-cost planning

Least-cost planning proponents and skeptics alike must come to terms with two questions: how much potential for efficient conservation is out there, and how much direct responsibility should utilities have for demand-side management and environmental protection This article examines these two questions in the light of how much potential for efficient conservation is available to be exploited and the present value of the environmental costs associated with the supply of electric power.

Fair competition : the law and economics of antitrust policy

The authors attempt to defend antitrust laws against the critics. After summarizing 15 years of court decisions, they conclude that the Sherman and Clayton Acts have not deviated from their historic and proper path.

The Adequacy of Prospective Returns on Generation Investments under Price Control Mechanisms

Abstract The absence of an effective demand response mechanism, combined with episodic supply deficiencies, recently led the author to endorse a joint letter to the Federal Energy Regulatory Commission (FERC) supporting price caps on a limited and temporary basis. But by far the preferable solution is to establish the conditions necessary for an elastic demand response to shortages, allowing us to shift our reliance back from the artificial constructs of reserve requirements and capacity markets.

Least cost planning generally and DSM in particular

Abstract This paper assesses the increasing tendency of public utility regulators in the 1980s to require utility companies to practice ‘least cost planning’ and in particular to treat demand side conservation measures on a parity with expansion of supply. It discusses the magnitude and causes of the persistence of unexploited opportunities for efficient conservation. Its principal conclusions are that subsidies for conservation should be limited to the extent to which the marginal cost of electricity supply exceeds the price, and that conservation programs should minimize the cross-subsidization of participants by non-participants.

Thinking about predation — A personal diary

Even after making allowance for the fact that the Court’s polling expert was probably a refugee from the Literary Digest (those of you who do not grasp the historical allusion have the consolation of youth) he failed to interview Scherer, Dirlam, Shepherd, Greer, Williamson or Salop I think Joel and I would still have been surprised by the widespread skepticism that prevails today even within our profession about what we regarded as a self-evident proposition, that

The British Balance of Payments and Problems of Domestic Policy

I. British postwar problems of adjustment, 368. — Possible avenues of escape from lower living standards, 372. — II. The governments double mandate, 374. — Comparison with the current American situation, 376. — Prospective capital shortage, 377. — III. Basic needs, 381. — Conflicting objectives, 383. — Resulting dangers: effect on exports, 386; on business incentives and voluntary savmgs, 388. — New outlooks, 390. — IV. The dilemma in terms of the balance of payments, 392. — Compromises inevitable, 393. — Conclusion, 395.

Electric Deregulation: Defining and Ensuring Fair Competition

Regulation has several important duties in the transition of the electricity industry to competition. But in fulfilling these responsibilities, regulators must refrain from policies pressed upon them by consumer representatives, on one side, and would-be rivals of utility companies, on the other, that would artificially handicap utilities and blunt the salutary forces of competition.

Can regulation and competition coexist? Solutions to the stranded cost problem and other conundra

The introduction of competition into the electric power industry must be reconciled with the pre-existing and continuing regulatory regime if it is to be in the public interest. In particular, the equitable and efficient way of handling stranded costs is to shift them on to all uses of the wires, utility and non-utility alike.