| Abstract: | The combination of competition and regulation established in the electricity industry of England and Wales stimulates production efficiency and thus helps the industry to achieve low costs. Nevertheless this system does have some disadvantages as regards the incentives it presents to generators and to suppliers. These deficiencies arise because Use of System Charges both for Distribution and for Transmission are determined in a way that inadequately reflects the structure and level of marginal costs. Furthermore, the way that profiling for consumers taking less than 100 kW will work is likely to inhibit tariff innovation. |
