Per-unit Charge Research Articles

A Social-Welfare based OPF for Integrated Power System with Unified Power Flow Controller

In the present transmission systems, it has become mandatory to utilize the available resources and also to substitute it with the renewable energy sources at the earliest. The optimal utilization of the resources provides an added advantage of reduction of its cost to the end consumers of electrical energy. In this paper, a multi- objective optimal power flow (OPF) in the existence of FACTS devices has been proposed for an integrated transmission system. The uniqueness of this paper is the choice of the multi-objective function. The objective function includes minimization of voltage deviation, power loss and negative social welfare (NSW). The reduction of loss and NSW ensures the reduction of per-unit charge of electricity at the customer-end leading to a greater customer satisfaction. The FACTS device used for the problem is Unified Power Flow Controller (UPFC). The hypothesis has been applied on an IEEE 30 bus system. The Mouth Flame Optimization Algorithm has been used for the optimization of objective function. The results obtained have been presented, compared and analysed in detail.

A Simplified Method for Quick Calculation of Corona I–V Characteristics of Unipolar Transmission-Line Configurations

This article is concerned with the calculation of the corona current-voltage characteristics of a unipolar high-voltage direct current (HVDC) transmission line with a single conductor stretched above the ground plane. In light of justified assumptions, the corona charge density around the conductor surface is obtained using an iterative procedure. This makes it possible to calculate the corona current for a given applied voltage. It is interesting to note that the per-unit charge density around the conductor surface with reference to its value at the gap axis has the same distribution irrespective of the conductor radius and height above the ground plane as well as of the applied voltage. Along this axis, Deutsch's assumption is waived and the charge density is calculated as being dependent on the conductor radius, conductor height, onset voltage, and applied voltage. A curve-fitting polynomial is made for the per-unit distribution of charge density around the conductor surface. Determination of the surface charge density at the gap axis and the polynomial describing the per-unit charge density distribution represent the basis of a proposed simplified method for quick calculation of the I-V characteristics, irrespective of the conductor radius and height above the ground plane. The corona current-voltage characteristics, as calculated by the proposed simplified approach, are compared with those calculated before and with those measured in different laboratories. The computation time is drastically reduced when using the proposed simplified method.

Shipping the Good Apples Under Strategic Competition

Production runs suffer from inadvertent quality variation. There are good apples; there are bad apples (also known as “seconds”). The Alchian-Allen theorem states that a common per-unit charge on two goods differentiated only by quality, increases the relative export demand for the higher quality good leading to local consumers lamenting that they cannot find them locally. While usually stated for competitive markets, firms with market power also suffer from inadvertent seconds in their production. For example, brand-name retailers send their seconds to outlets, even though this undercuts the demand for their firsts. A model is presented of oligopolistic firms choosing production and what fraction of their first and seconds to export: a model of “shipping the good apples” with strategic competition. In this model an increase in the per-unit charge can increase the absolute fraction of high quality exported. Despite this, shipping the good apples may not hold, that is, an increase in the per-unit charge can decrease the quantity demanded of good apples relative to bad ones. Rather, shipping the good apples holds when the export market’s willingness-to-pay for high quality is greater (or greater value for “quality upgrading” (Johnson and Myatt, 2006)). Despite the consumers’ lament, domestic consumer welfare increases with exporting.

User-Initiated Data Plan Trading via a Personal Hotspot Market

Mobile data services are becoming the main driver of a wireless service provider’s (WSPs) revenue growth, and two-part tariff data plans (each including a lump-sum fee and a per-unit charge) are usually provided to wireless users. Some users can easily use up their monthly data quota and may pay for costly data over-usage. Motivated by users’ diverse usage behavior (more or less than the subscribed data quotas), this paper proposes a new type of user-initiated network for cellular users to trade data plans by leveraging personal hotspots (PHs) with users’ smartphones. A user with data surplus can set up a PH and share the cellular data connection to another user with data deficit in the vicinity. Due to users’ randomness in data usage, incentive to trade, and user mobility to enter or leave the PH connection range, the analysis on the secondary trading market is challenging. To overcome these issues, we propose a PH-market for users with diverse data usage behaviors and random user mobility to directly trade data as sellers and buyers, by designing a market-clearing price. It is shown that the PH-market greatly saves all users’ expected costs when the existence condition of the PH-market is met. Finally, as this PH-market will challenge the WSP’s revenue collection (especially the surcharge from users’ data over-usage), we analyze the WSP’s response to the PH-market and propose two effective countermeasure strategies by either reducing the selling users’ data quota in their data plans (the PH-market’s supply) or increasing the buying users’ data quota (the PH-market’s demand). When we have more than one WSP and they are competitive, we show that one WSP can take advantage of the PH-market by indirectly selling more data to the other WSP’s users.

Who should pay for renewable energy? Comparing the household impacts of different policy mechanisms in Ireland

Along with environmental impacts, renewable energy affects societal welfare through subsidy costs and electricity price changes. Identifying the distribution of both these impacts is of increasing importance as deployment grows. Subsidies are commonly financed by consumption-based Public Service Obligation (PSO) levies. We compare the distributional impact of different PSO levy structures using the example of a market with high and rising renewables penetration: Ireland. A flate-rate charge is more regressive than a unit-based charge. The regressive impacts of a fixed per-unit charge are greater for a subgroup of heavy electricity users, some with low incomes. Incremental Block Pricing (IBP) exaggerates these effects. A hybrid fixed/variable structure reduces regressivity for heavy users but lessens overall regressivity reduction. Redistributive mechanisms structured like Ireland's Household Benefits Package imperfectly target poorer households, with income and household size-based measures more effective. Including electricity price reductions due to renewables deployment, fixed per-unit charges have a neutral effect while flat charges redistribute some burden from rich to poor. IBP shifts cost to heavy electricity users, predominantly large households. IBP yields a negative net burden for most households across all income groups. These findings are generalised to inform equitable renewable energy subsidy mechanisms both in Ireland and elsewhere.

Tax Incidence When Quality Matters: Evidence from the Beer Market

What are the effects of a per-unit tax on the sales of a good? The answer in standard economics textbooks is a reduction in quantity and an increase in price. However, the homogeneous-product assumption in such treatments is not always correct because the taxed product is frequently sold under numerous differentiated brands. In general, quantity and price adjustments to a per-unit tax increase may vary differentially by brand, which implies that tax incidence requires a more thorough analysis than the standard one. In this paper, we test a popular theoretical prediction that the effects of a per-unit tax on sales may be different for low-quality brands than for high-quality brands. We exploit two exogenous variations on per-unit charges (excise taxes and shipping costs) in the beer industry to study if quality is an important determinant of equilibrium quantity, prices and advertising expenditures. We find that, when faced with higher per-unit charges, the equilibrium price and quantity of a brand are usually positively associated with its quality level; similarly, higher per-unit charges appear to provide firms with an incentive to shift advertising effort towards brands of higher quality. We discuss implications for public policy and firm profitability.

The role of self selection, usage uncertainty and learning in the demand for local telephone service

Telephone services are often characterized by the presence of ‘fixed’ plans, involving only a fixed monthly fee, as well as ‘measured’ plans, with both fixed fees and per-unit charges for usage. Consumers are faced with the decisions of which plan to choose and how much to use the phone and these decisions are not, in general, independent. Due to the presence of a time lag between plan choice and usage decisions, consumers are uncertain about usage at the plan-choice stage. We develop a structural discrete/continuous model of plan choice and usage decisions of consumers that accounts for such uncertainty. Prior research has also found that consumers switch less often from fixed plans to measured plans to gain from potential savings than vice versa. Consumer uncertainty regarding their mean usage levels and different rates of learning by consumers in the two plans is a potential explanation for this phenomenon. We extend our discrete/continuous model to account for consumer learning about their mean usage and estimate different rates of learning for the two types of plans.

Two-Part Tariffs with Quality Degradation

There is a gap between the recommendations of the theory of second degree price discrimination and the practices of firms that target consumer segments with varying willingness to pay with two or more distinct tariffs. We present a model where consumers' private information is single dimensional and the allocation rule is two-dimensional. In contrast to the established result in nonlinear pricing, we find that the per-unit price may be non-monotonic: low-demand consumers face a two-part tariff with a per-unit price possibly below marginal cost, and even zero, whereas high demand consumers face tariffs with per-unit charges above marginal cost. On the other hand, all consumers but the one on the top of the distribution are faced with a quality restriction, quality being monotonically increasing in type. Finally, we show that this practice increases welfare due to increased consumption efficiency.

Channel Coordination When Retailers Compete

This paper explores channel coordination by a manufacturer that sells through competing retailers and that treats these retailers equally, as required by the Robinson-Patman Act. The authors show that, in general, there exists no single two-part tariff with a constant per-unit charge that will duplicate the behavioral results (i.e., prices, quantities, and channel profits) that are obtained by a vertically integrated system; that is, the channel cannot be coordinated except in the trivial cases of identical or noncompeting retailers. However, an appropriately specified quantity-discount schedule will enable the channel to earn the same profits generated by a vertically integrated system. Conditions are derived under which a manufacturer will prefer to offer various two-part tariffs with constant per-unit charges instead of the channel-coordinating quantity-discount schedule. The authors also establish the existence of a menu of two-part tariffs that mimics all results of a vertically integrated system. However, only under stringent conditions will retailers select the appropriate tariff from the menu. When these conditions are not satisfied, the channel is worse off than in the case of a single, second-best tariff. It is also demonstrated that under a wide range of parametric values the manufacturer will prefer to offer the second-best two-part tariff rather than a menu of two-part tariffs that could maximize channel profits.

Elasticities of rate schedule parameters

The rate schedules for services provided by regulated industries are often not defined in terms of simple per-unit charges but as multipart tariffs. For example, in the case of block price rates, the rate parameters are the definition of the block limits and the per-unit charges in each block. The analysis of these rates is complicated by the fact that most econometric models provide only per-unit or marginal-cost-based elasticities. This paper presents a technique for determining the rate schedule elasticities from elasticities for functions of the rate schedule parameters such as per-unit price elasticities. Also presented are methods for determining elasticities for combinations of service characteristics and the price schedule parameter elasticities for an entire service market. Examples are given for block water rates and Hopkinson and time-of-day electricity rates.

A Unique Procedure for Allocating Common Costs from a Production Process

A characteristic of industry is the prevalence of production processes which yield multiple products. When the costs of producing multiple products are separable, they are readily identified with individual products, so no particular problem arises in assigning a per-unit charge, or cost, for producing each product. Common costs, or joint costs, are costs which cannot be readily identified with individual products. They are especially prominent in extractive, agricultural, and chemical industries, as well as in industries where different grades of the same product are obtained. Furthermore, if the notion of a production process is taken to a more abstract level, it can be argued that common costs are also prevalent in service industries (e.g., postal delivery costs for the delivery of multiple types of mail and telephone service costs associated with providing telephone communication to multiple areas at multiple times of the day).1 In this paper, we consider the problem of allocating common costs in the production of multiple products.2 More precisely, suppose there is a production process which yields n different goods or services (or different grades of the same good or service), and to produce xi units of good i, i