ABSTRACT

Electricity is an unusual commodity in many respects. One is that the powerproduced by a particular generator does not go to that generator’s customers.More precisely, if a generator sells N kilowatts of power to its customers, it is merely committing to inject N kilowatts of electricity into the overall electricity system at the same time that the customers are taking N kilowatts out of it. It is as if Starbucks sold M cups of coffee by dumping that volume of coffee into a common vat mixed with coffee from every other coffee shop, out of which its customers had the right to pour out M cups.