Using Auctions to Divest Generation Assets

Lisa J. Cameron, Peter Cramton and Robert Wilson , The Electricity Journal 10(10) , 22-31 , December 1997.

In most states, ratepayers will compensate utilities for their stranded costs, so these costs must be measured accurately and in a way that is easily understood by all concerned parties. Here we describe the options for measuring stranded costs and argue that a simultaneous ascending auction is the best approach.

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