Group for Research in Decision Analysis


Gas Transportation and Storage Under a Price Cap Regulation


We investigate the effects of a price cap regulation on the consumer’s surplus within the framework of two gas ownership structures. In the case of a firm owning both the gas transportation and storage facilities, we find that tightening the price cap con- straint is always beneficial to the consumers in terms of consumer’s surplus. In the case of a separate ownership, the impact of changes in the cap for the access fee is larger than that of the storage fee, so that a tightening of one price cap and a softening of the other may also lead to consumer’s surplus increase.

, 16 pages