摘要：Several electricity companies, including Enemalta, facea regulated maximum consumer price on the electric units theyproduce and supply on the market. This regulated consumer pricegives rise to financial losses for the electricity company because itcauses a divergence between the unit cost and the consumer priceof each unit of electricity demanded and supplied. Unexpectedchanges in temperature increase the demand for electricity at theregulated price and cause even larger financial losses for theelectricity company. Similarly, unexpected increases in fuel oilcosts increase the production cost per electric unit and also widenthe financial losses for the electricity company. The long history inMalta of political regulation and social intervention in the electric-ity market, make it very difficult to transform the regulatedconsumer price into a market clearing equilibrium one. This paperargues that the only option for the electricity company is to usederivatives to insure away the financial losses brought about byunexpected temperature and fuel oil shocks.
