Transmission and Ratebase: A Match Not Made in Heaven

Abstract:

This article examines how the cost of transmission of power is to be incorporated in the utilities ratebase in a competitive bulk power market. The topics include a call for public discussion and debate, who should bear the risk of residual revenue responsibility for transmission assets, are actual costs and uses reflected in the allocation of responsibility for transmission revenues, and how can transmission pricing be used to reduce the likelihood of anti-competitive behavior by those entities owning both generation and transmission facilities.