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By Monica Greer

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As such, they are nonutility, for-profit companies with no assigned service territories. In addition, IPPs are not allowed to own transmission facilities and must contract for this service to deliver power to their customers, which they sell at market-based rates subject to receiving FERC authorization. Finally, IPPs are not “qualified facilities” and some are exempt wholesale generators (EWGs), which means that they are exempt from certain FERC financial reporting and ownership restrictions. Municipal Utilities and Other Publicly-Owned Utilities Municipal utilities and other publicly-owned utilities are nonprofit government entities that serve at either the local or the state level.

Concerning the generating stage, it is necessary to distinguish between studies that use the plant as the sample unit and those that use the firm itself. In their seminal paper, Christensen and Greene (1976) used both Nerlove’s 1955 data and also 1970 data on those same firms, and found that by 1970, most firms were generating electricity at a point on the average cost curve in which economies of scale had been exhausted. , in the diseconomies of scale region of the long-run average cost curve).

Later studies include Maloney (2001), who estimated the MES at 321 MW and 260 MW for coal- and gas-fired plants, respectively, but found that the average cost curve is flat at this level. Kleit and Terrell (2001) and Hiebert (2002) found increasing scale economies for most observations. Hiebert found that the degree-of-scale economies was 20% in coal-fired plants and 12% for natural gas–fired plants for average sample values (780 MW and 284 MW, respectively). This work also found that major economies can be attained by producing with more than one plant for each kind of generation.

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