We look at the effects of restructuring on three issues: (a) economic surplus and environmental quality, (b) the cost of NOx control policies and who bears the costs, and (c) the cost-effectiveness of a seasonal and an annual NOx cap in the SIP Call region. We find that without the NOx cap,...

We investigate the cost-effectiveness and distributional effects of a revenue-raising auction, grandfathering, and a generation performance standard as alternative approaches for distributing carbon emission allowances in the electricity sector. We solve a detailed national electricity market...

This paper analyzes uncertainties surrounding the benefits and costs of a policy to reduce nitrogen oxides (NOX) emissions from electricity generation in the eastern U.S. Under each of 18 scenarios examined, we find an annual policy would yield net benefits that are at least as great as those...

Planning of the electricity transmission system generally focuses on the pros and cons of providing generation close to the source of the power demand versus remote generation linked via the transmission system. Recent electricity supply problems in the western United States have renewed...

This paper analyzes the benefits and costs of policies to reduce nitrogen oxides (NOx) emissions from electricity generation in the United States. Because emissions of NOx contribute to the high concentration of atmospheric ozone in the eastern states that is associated with health hazards, the...

We investigate the cost-effectiveness and distributional effects of a revenue-raising auction, grandfathering, and a generation performance standard as alternative approaches for distributing carbon emission allowances in the electricity sector. We solve a detailed national electricity market...

Paradoxically, owners of existing generation assets may be better off paying for carbon dioxide emission allowances than having them distributed for free. This analysis shows that it takes just 7.5% of the revenue raised under an auction to preserve the asset values of existing generators.

The U.S. electric power sector is in the midst of two major regulatory changes. One is the change from cost-of-service regulation to competition as a means of disciplining electricity prices, often referred to as “electricity restructuring.” The other is the apparently increasing scope and...