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    Competition: EE 155 Power System Economics Engr. Jay S. Villan

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    Jay Sunga Villan
    This document defines key terms related to electricity market structures and models of competition. It discusses vertically integrated utilities, generating companies, distribution companies, retailers, market operators, independent system operators, transmission companies, regulators, and large and small consumers. It then outlines four models of competition: monopoly, purchasing agency (integrated and disaggregated versions), wholesale competition, and retail competition. Finally, it notes that privatization and the introduction of competition are separate but related changes, as privatization involves selling publicly owned utilities to private investors, while competition can exist between public and private utilities.

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    Competition: EE 155 Power System Economics Engr. Jay S. Villan

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    Jay Sunga Villan
    74 views14 pages
    This document defines key terms related to electricity market structures and models of competition. It discusses vertically integrated utilities, generating companies, distribution companies, retailers, market operators, independent system operators, transmission companies, regulators, and large and small consumers. It then outlines four models of competition: monopoly, purchasing agency (integrated and disaggregated versions), wholesale competition, and retail competition. Finally, it notes that privatization and the introduction of competition are separate but related changes, as privatization involves selling publicly owned utilities to private investors, while competition can exist between public and private utilities.

    Original Description:

    A discussion of models of competition in the power industry

    Original Title

    0001 Introduction Competition

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    This document defines key terms related to electricity market structures and models of competition. It discusses vertically integrated utilities, generating companies, distribution companies, retailers, market operators, independent system operators, transmission companies, regulators, and large and small consumers. It then outlines four models of competition: monopoly, purchasing agency (integrated and disaggregated versions), wholesale competition, and retail competition. Finally, it notes that privatization and the introduction of competition are separate but related changes, as privatization involves selling publicly owned utilities to private investors, while competition can exist between public and private utilities.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    74 views14 pages

    Competition: EE 155 Power System Economics Engr. Jay S. Villan

    Uploaded by

    Jay Sunga Villan
    This document defines key terms related to electricity market structures and models of competition. It discusses vertically integrated utilities, generating companies, distribution companies, retailers, market operators, independent system operators, transmission companies, regulators, and large and small consumers. It then outlines four models of competition: monopoly, purchasing agency (integrated and disaggregated versions), wholesale competition, and retail competition. Finally, it notes that privatization and the introduction of competition are separate but related changes, as privatization involves selling publicly owned utilities to private investors, while competition can exist between public and private utilities.

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    You are on page 1of 14

    Competition

    Chapter 1
    EE 155 Power System Economics
    Engr. Jay S. Villan
    Order of Presentation

    1. Definition of Terms
    2. Models of Competition
    3. Competition and Privatization
    Definition of Terms

    1. Vertically integrated utilities own generating plants as well as


    a transmission and distribution network
    2. Generating companies (gencos) produce and sell electrical
    energy.
    3. Distribution companies (discos) own and operate distribution
    networks. In a traditional environment, they have a monopoly
    for the sale of electrical energy to all consumers connected to
    their network.
    Definition of Terms

    4. Retailers buy electrical energy on the wholesale market and


    resell it to consumers who do not wish, or are not allowed, to
    participate in this wholesale market.
    5. A market operator (MO) typically runs a computer system that
    matches the bids and offers that buyers and sellers of
    electrical energy have submitted.
    6. The independent system operator (ISO) has the primary
    responsibility of maintaining the security of the power system.
    Definition of Terms

    7. Transmission companies (transco) own transmission assets


    such as lines, cables, transformers and reactive compensation
    devices.
    8. The regulator is the governmental body responsible for
    ensuring the fair and efficient operation of the electricity
    sector.
    9. Small consumers buy electrical energy from a retailer and
    lease a connection to the power system from their local
    distribution company
    Definition of Terms

    10. Large consumers, on the other hand, will often take an active
    role in electricity markets by buying their electrical energy
    directly through the market.
    Models of Competition
    Model 1: Monopoly
    Model 2: Purchasing Agency
    (Integrated Version)
    Model 2: Purchasing Agency
    (Disaggregated Version)
    Model 3: Wholesale Competition
    Model 4: Retail competition
    Competition and Privatization

    In many countries, the introduction of competition in the supply of


    electricity has been accompanied by the privatization of some or all
    components of the industry.
    Privatization is the process by which publicly owned utilities are sold
    by the government to private investors.
    These utilities then become private, for-profit companies.
    Privatization is not, however, a prerequisite for the introduction of
    competition.
    None of the four models of competition described above implies a
    certain form of ownership.
    Public utilities can, and in many instances do, compete with private
    companies.
    Group 1

    Prepare a report answering the questions on page 9


    of Chapter 1 Fundamentals of Power System
    Economics Daniel Kirschen and Goran Strbac 2004
    John Wiley & Sons, Ltd ISBN: 0-470-84572-4

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