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Abstract:
The United Kingdom generally fights poverty directly - through the government's benefit system - and not through utilities. But British regulators have taken certain measures that help utility consumers (mostly, but not always, poor consumers). Other countries may be able to copy some of their techniques. Green studies a number of ways in which British regulators have helped poorer consumers.

British Telecommunications offers a lower user tariff and a very cheap service with most outgoing calls barred, to attract customers who could not afford the full service. The gas regulator has taken action to reduce price differentials between customers who pay in cash (mostly, but not always, poor customers) and those who pay with bank transfers (mostly, but not always, better off customers). The electricity industry faces a series of rules and codes of practice governing its dealings with domestic consumers.

Some of these schemes will help all consumers; others are aimed at, but not exclusive to, the poor. One challenge facing utilities in some countries is that of expanding their networks to reach millions of unserved (mostly poor) customers. The United Kingdom achieved nearly universal service in geographical terms while the utilities were state-owned. The utilities were serving some customers who were already profitable and were simply required to serve others, who might not be. It might be possible to grant a concession, or privatize a new company, on a similar basis of bundling social obligations with opportunities for profit, but it will be important to ensure that obligations are performed properly. U.K. regulators have been fairly successful at protecting existing customers; other countries may be able to copy some of their techniques.

This paper - a product of Governance, Regulation, and Finance, World Bank Institute - is part of a larger effort in the institute to increase understanding of infrastructure regulation.

Regulation, Utilities, Universal Service Obligations

Abstract:
This Paper discusses the electricity reforms in California and in England and Wales. In both cases, a centralized spot market played a major role, and both markets have now been abolished. This Paper argues that their disappearance is not evidence that future electricity restructuring should avoid the use of spot markets. Instead, the problems in England and Wales were largely due to market power. In California, problems arising from market power and a tightening demand-supply balance were turned into a disaster because the spot market had not been backed up by hedging contracts.

Electricity markets, hedging contracts

Abstract:
Over the last 15 years, an increasing number of electricity industries has replaced vertical integration with markets as the main method of organizing production. Electrical energy is traded in many European and US markets, while the USA also has markets for generating capacity. US generators can reduce the cost of complying with environmental regulations by trading emissions of sulphur dioxide, while Europe has just started a carbon-dioxide emissions-trading scheme. This article discusses the way in which these markets put economic principles into practice. In particular, it shows that several different market designs can provide theoretically equivalent incentives for generators to build capacity, and that emissions trading may have unexpected impacts upon electricity prices.

Griffith crack, rectangular layer, shear stress, stress intensity factors

Abstract:
Competition in the electricity industry requires properly functioning wholesale markets. This paper discusses the better-established electricity markets of Europe, in the Nordic countries, England and Wales, and Spain. The different market designs can all produce efficient outcomes, if not hindered by market power. Long-term contracts provide some defence against market power, and give price stability to promote investment. Competition in electricity retailing may discourage retailers from signing long-term contracts in future.

Abstract:
Starting in 1998, the electricity market in England and Wales will be opened up to full competition, and all consumers will be allowed to choose their electricity supplier. This promises to result in lower prices, but there will be additional transactions costs exceeding #100 million a year for the first five years. Relative to a counterfactual without competition, there are likely to be large transfers from electricity companies (and the coal industry) to consumers, but the companies lose more than consumers gain. This conclusion might be reversed, if competitive pressure leads to significant additional cost savings in the future.