165-176

• Efthymoglou, P.
• Hadjidema, S.
• Πέκκα - Οικονόμου, Βικτωρία

In this paper we discuss the efficient component pricing rule (ECPR) developed by Baumol and Willig for the access to the interconnected electricity system under competitive conditions. We compare this rule with the Ramsey and the accounting pricing rules and we propose the cost formula for ECPR. The Independent System Operator (ISO) should charge bulk power traders a per unit ex ante transmission access fee equal to the sum of direct cost plus the opportunity cost. The implementation of this formula ensures that (a) independent rivals enter the electricity market only if their marginal cost of production is lower than the marginal production cost of the electricity supply industry (Public Power Corporation) and (b) the electricity supply industry is in the position to afford the Public Service Obligations (PSO).

• Economics and Business

• Economics

Access Pricing, Efficient Component Pricing Rule, Ramsey Pricing Rule, Accounting Pricing Rule, Networks, Electricity, Transmission

JEL classification: H41