HW3 - History of the electric power sector

.docx

School

North Carolina State University *

*We aren’t endorsed by this school

Course

300

Subject

Economics

Date

Apr 3, 2024

Type

docx

Pages

3

Uploaded by MegaPelican2226 on coursehero.com

ES 300 – Homework 3 History of the Electric Power Sector Ariana Medeiros Azevedo a. Why do we mostly have AC utility scale power systems instead of DC? We mostly have AC utility scale power systems because utilizing an AC power system simplifies the transmission of electricity over long distances through the employment of transformers. b. What economic principle served as the justification for allowing utilities to operate as monopolies for such a long time? Economies of sale c. What is the difference between a retail and wholesale electricity market? Which one do you and I participate in? Wholesale Market: exchange of large quantities of electricity that occurs among power plants, independent producers, and distribution companies, and their prices are determined by market dynamics. Retail market: distribution/utility companies supplying and selling electricity to end use customers to individuals, like you and me. d. Are wholesale or retail electricity prices higher? Why? Retail prices are higher because they also include the extra cost of distributing and transmitting electricity to its customers.
e. What is the difference between a “regulated monopoly” and “deregulated” electricity market? Which one does Duke Energy participate in? Regulated - one company (a monopoly) operates everything from generation, transmission, and distribution Deregulated - generation and transmission and distribution are separate; power plants compete to sell electricity in wholesale market Duke Energy is a regulated public electricity market f. In a regulated (monopoly) system, explain why retail prices can go UP if demand goes DOWN. With regulated monopolies costs staying relatively the same because of fixed infrastructure payments for them to keep up their revenues if the demand decreases the utility commissions allow them to raise their prices on customers. g. How is this different than how prices move in a competitive wholesale market in a deregulated state? i. Hint: for a refresher, look at slides on “Supply, Demand and Market Prices” from the finance and economics bootcamp. The contrast lies in the fact that regulated monopoly systems tend to exhibit a higher degree of inelasticity in price elasticity of demand compared to competitive wholesale markets in deregulated states. h. Read pages 1-24 of the report “Causes and Lessons of the California Electricity Crisis.”
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Recommended textbooks for you
Text book image
Microeconomic Theory
Economics
ISBN:9781337517942
Author:NICHOLSON
Publisher:Cengage
Text book image
Microeconomics A Contemporary Intro
Economics
ISBN:9781285635101
Author:MCEACHERN
Publisher:Cengage
Text book image
ECON MICRO
Economics
ISBN:9781337000536
Author:William A. McEachern
Publisher:Cengage Learning
Text book image
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Microeconomics
Economics
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
SEE MORE TEXTBOOKS
Recommended textbooks for you
Text book image
Microeconomic Theory
Economics
ISBN:9781337517942
Author:NICHOLSON
Publisher:Cengage
Text book image
Microeconomics A Contemporary Intro
Economics
ISBN:9781285635101
Author:MCEACHERN
Publisher:Cengage
Text book image
ECON MICRO
Economics
ISBN:9781337000536
Author:William A. McEachern
Publisher:Cengage Learning
Text book image
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Microeconomics
Economics
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
SEE MORE TEXTBOOKS