1000 MITE-o105/ds r5

Electric Power Transmission: Rationing a Limited Resource In the redesigned electric power industry, electricity-generating companies compete for customers and then transmit their electricity rarely be realized. Money collected by the central coordinator can be used to maintain and upgrade the transmission system. The researchers have already developed software that can produce using the existing transmission system. But at times the transmission system connecting generators and customers may not be capable of handling all sales. Who gets to transmit their electricity and who doesn’t during those times is an important technical and legal question. A plan proposed by researchers at MIT and McGill University lets market forces decide. Under their plan, electricity generators and their customers make deals with one another and then submit their transmission needs to a central coordinator that oversees operation of the transmission system. The coordinator responds with a transmission price for each proposed transaction. If a given transaction will move the transmission system toward technical problems, the price is higher. The more serious and more imminent the problem, the higher the price. The market should thus self-adjust: higher prices will cause customers to get off the transmission system, so impending problems should