Economics, Econometrics and Finance
8 years ago

New model shows how reliability levels impact public utility pricing.

Reliability and public utility pricing
Crew, Paul R. Kleindorfer

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The article explores how to set prices for public utilities while ensuring reliability. It looks at how to balance profits or welfare with reliability constraints. The study shows that having specific reliability requirements can improve regulation policies. This means that setting prices for utilities can be more effective when considering both financial goals and reliability needs.