Should merchant transmission investment be subject to a must-offer provision?

• Published in: Journal of regulatory economics Vol. 30; no. 3; pp. 233 - 260
• Main Authors: Brunekreeft, Gert, Newbery, David
• Format: Journal Article
• Language: English
• Published: Norwell Springer 01.11.2006; Springer Nature B.V
• Subjects: Economic regulation; Economic theory; Electricity; Electricity distribution; Investments; Monopolies; Power supply; Production capacity; Public economics; Regulation; Regulatory policy; Studies; U.S.A; Utilities; Europe

Merchant electricity transmission investment is a practically relevant example of an unregulated investment with monopoly properties. However, while leaving the investment decision to the market, the regulator may decide to prohibit capacity withholding with a must-offer provision. This paper examin...