Cicala, Steve. “Imperfect Markets versus Imperfect Regulation in U.S. Electricity.” In, 2016.Abstract

    This paper estimates changes in electricity generation costs caused by the introduction of market mechanisms to determine output decisions in service areas that were previously using command-and-control-type operations. I use the staggered transition to markets from 1999- 2012 to evaluate the causal impact of liberalization using a nationwide panel of hourly data on electricity demand and unit-level costs, capacities, and output. To address the potentially confounding effects of unrelated fuel price changes, I use machine learning methods to predict the allocation of output to generating units in the absence of markets for counterfactual pro- duction patterns. I find that markets reduce production costs by $3B per year by reallocating output among existing power plants: Gains from trade across service areas increase by 20% based on a 10% increase in traded electricity, and costs from using uneconomical units fall 20% from a 10% reduction in their operation.

    Agency, Environmental Protection. “Environmental Protection Agency. Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units.” In, 2014.Abstract



    This Regulatory Impact Analysis (RIA) discusses potential benefits, costs, and economic impacts of the proposed Emission Guidelines for Greenhouse Gas Emissions from Existing Stationary Sources: Electric Utility Generating Units (herein referred to EGU GHG Existing Source Guidelines). This RIA also discusses the potential benefits, costs and economic impacts of the proposed Standards of Performance for Greenhouse Gas Emissions from Reconstructed and Modified Stationary Sources (EGU GHG Reconstructed and Modified Source Standards).


    ES.1 Background and Context of Proposed EGU GHG Existing Source Guidelines Greenhouse gas pollution threatens Americans' health and welfare by leading to longlasting changes in our climate that can have a range of severely negative effects on human health and the environment. Carbon Dioxide (CO2) is the primary greenhouse gas pollutant, accounting for nearly three-quarters of global greenhouse gas emissions and 84 percent of U.S. greenhouse gas emissions. Fossil fuel-fired electric generating units (EGUs) are, by far, the largest emitters of GHGs, primarily in the form of CO2, among stationary sources in the U.S. In this action, the EPA is proposing emission guidelines for states to use in developing plans to address greenhouse gas emissions from existing fossil fuel-fired EGUs. Specifically, the EPA is proposing state-specific rate-based goals for carbon dioxide emissions from the power sector, as well as emission guidelines for states to use in developing plans to attain the statespecific goals. This rule, as proposed, would set in motion actions to lower the carbon dioxide emissions associated with existing power generation sources in the United States.

    Linares, Pedro, Francisco Javier Santos, Mariano Ventosa, and Luis Lapiedra. “Incorporating oligopoly, CO2 emissions trading and green certificates into a power generation expansion model.” Automatica 44, no. 6 (2008): 1608-1620. Publisher's VersionAbstract
    This paper presents a generation expansion model for the power sector which incorporates several features that make it very interesting for application to current electricity markets: it considers the possible oligopolistic behavior of firms, and incorporates relevant policy instruments, carbon emissions trading and tradable green certificates. It combines powerful traditional tools related to the detailed system operation with techniques for modeling the economic market equilibrium and a formulation for the resolution of the emissions permit and tradable green certificates market equilibrium. The model is formulated as a Linear Complementarity Problem (LCP) which allows the optimization problem for each firm considering the power, carbon and green certificate markets to be solved simultaneously. The model has been implemented in GAMS. An application to the Spanish power system is also presented.