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Electricity Without Price Controls - Jose Antonio Vanderhorst-Silverio

We Need Demand Elasticity

Posted At : November 16, 2007 7:05 PM | Posted By : Jose Antonio Vanderhorst-Silverio
Related Categories: Customer Services, Asset Management, Regulation, Finance, Technology, Fossil, Energy Efficiency, End-Use Management, General, Operations

Say fuel oil increase from $90 to $100 per Barril. 11% increase. What could one expect.

The problem with deregulation is that fuel prices are amplified into electricity prices. Expect more than 11% increase in electricity prices. Sometimes much more.

The problem with regulation is that fuel clauses transfer fuel prices. Expect an 11% increase.

EWPC mitigates fuel prices by introducing demand elasticity to the industry. Expect less than 11% increase. Sometimes much less.

So the message is "we need demand elasticity in the power industry."

As simple as that.

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