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Posted: May 13th, 2018
Energy Economics short discussion
Suppose you are a stakeholder in a debate over implementing a new pricing structure in your community for the natural gas utility. There are four pricing structures in the debate, as summarized in this table.
Your task this week is for the four of you to discuss the pros and cons of these rate structures:
- You should consider the different principles that may affect how you evaluate each one: economic efficiency, distributional equity, cost-based revenue allocation, and political/interest group considerations
- Each one of you is assigned to one of the rate structures; in your discussion you should defend the merits of that rate structure from the point of view of a stakeholder who would benefit from that rate structure (e.g., residential customer, industrial customer, commercial customer, local natural gas company, state PUC regulator)
- Make sure you specify/roleplay in the discussion whose point of view you are representing!
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