Skip Ribbon Commands
Skip to main content
Home | Support RFF | Join E-mail List | Contact
RFF Logo
Skip navigation links
RESEARCH TOPICS
CENTERS
PUBLICATIONS
NEWS
EVENTS
RESEARCHERS
ABOUT RFF
 

 

 
Join E-mail List
Please provide your e-mail address to receive periodic newsletters and invitations to public events
 
 
Market Failures in Real-Time Metering: A Theoretical Look
Timothy J. Brennan
RFF Discussion Paper 02-53 | October 2002
RESEARCH TOPICS:
Abstract
Restructuring the electricity market may secure efficiencies by moving away from cost-of-service regulation, with typically (but not necessarily) time-invariant prices, and allowing prices to reflect how costs change. Charging "real time" prices requires that electricity use be measured according to when one uses it. Arguments that such real-time metering should be a policy objective promoted by subsidizing meters or delaying restructuring until meters are installed, require more than these potential benefits. They require positive externalities to imply that too few meters would be installed through private transactions. Real-time metering presents no systematic externalities when utilities must serve peak period users, and may present negative externalities under some conditions. Positive externalities are likely when electricity is rationed through blackouts. Real-time metering may or may not increase welfare when peak period wholesale markets are not competitive; one might want to prohibit real-time metering in such situations even if metering itself were costless.
RFF Home | RFF Press: An Imprint of Routledge Terms of Use | Privacy Policy | Copyright Notice
1616 P St. NW, Washington, DC 20036 ยท 202.328.5000 Feedback | Contact Us