the impact of marginal cost pricing on electric utility revenues – a quantitative case study
DESCRIPTION
The Impact of Marginal Cost Pricing on Electric Utility Revenues – A Quantitative Case Study. By John Kelly Presented at the Rutgers University Center for Research in Regulated Industries 20 th Annual Western Conference. Hyatt Regency, Monterey, California June 28, 2007. - PowerPoint PPT PresentationTRANSCRIPT
The Impact of Marginal Cost Pricing on Electric Utility Revenues – A Quantitative Case Study
By John Kelly
Presented at the Rutgers University
Center for Research in Regulated Industries
20th Annual Western Conference
Hyatt Regency, Monterey, CaliforniaJune 28, 2007
TABLE 1 - RETAIL REVENUE FROM MARGINAL COST PRICING ($1,000)LOAD SURVEY MWH (BY HOUR) x DECREMENTAL COST
Class 1 2 3 4 5 6 7 8 9 10 11 12 Grand TotalRES 4,423$ 3,327$ 2,447$ 1,953$ 3,641$ 3,787$ 4,933$ 3,637$ 3,237$ 2,021$ 2,339$ 3,707$ 39,453$ GS 1,419$ 1,161$ 1,089$ 970$ 1,502$ 1,476$ 1,600$ 1,282$ 1,217$ 979$ 966$ 1,269$ 14,931$ HS 290$ 213$ 129$ 89$ 146$ 144$ 166$ 133$ 128$ 90$ 114$ 213$ 1,855$ GSD 1,255$ 1,043$ 991$ 913$ 1,470$ 1,423$ 1,531$ 1,210$ 1,182$ 984$ 923$ 1,136$ 14,062$ LLP 3,588$ 2,996$ 2,956$ 2,796$ 4,264$ 4,134$ 4,207$ 3,430$ 3,326$ 3,002$ 2,812$ 3,234$ 40,745$ LIGHTING 80$ 58$ 46$ 33$ 48$ 31$ 39$ 33$ 38$ 49$ 50$ 74$ 579$ TOTAL 11,056$ 8,798$ 7,658$ 6,754$ 11,070$ 10,996$ 12,476$ 9,726$ 9,127$ 7,125$ 7,204$ 9,633$ 111,624$
TABLE 2 - RETAIL REVENUE FROM TRADITIONAL RATES ($1,000)LOAD SURVEY MWH x 2004 YIELDS
Class 1 2 3 4 5 6 7 8 9 10 11 12 Grand TotalRES 4,864$ 4,368$ 3,803$ 3,497$ 4,395$ 6,844$ 8,790$ 7,889$ 7,208$ 3,457$ 4,253$ 4,978$ 64,346$ GS 1,506$ 1,439$ 1,441$ 1,419$ 1,463$ 2,263$ 2,537$ 2,489$ 2,965$ 1,416$ 1,408$ 1,555$ 21,902$ HS 199$ 175$ 116$ 88$ 104$ 217$ 310$ 249$ 235$ 91$ 123$ 181$ 2,087$ GSD 1,270$ 1,181$ 1,288$ 1,293$ 1,481$ 1,683$ 1,816$ 1,789$ 1,768$ 1,371$ 1,309$ 1,295$ 17,544$ LLP 3,234$ 3,174$ 3,659$ 3,364$ 3,813$ 4,343$ 4,454$ 4,639$ 4,347$ 3,842$ 3,520$ 3,370$ 45,759$ LIGHTING 142$ 124$ 120$ 105$ 98$ 88$ 99$ 105$ 113$ 129$ 134$ 146$ 1,402$ TOTAL 11,215$ 10,460$ 10,427$ 9,766$ 11,355$ 15,437$ 18,006$ 17,160$ 16,635$ 10,306$ 10,747$ 11,524$ 153,040$
TABLE 3 - RETAIL REVENUE COMPARISONS
Class 1 2 3 4 5 6 7 8 9 10 11 12 Grand TotalRES -9% -24% -36% -44% -17% -45% -44% -54% -55% -42% -45% -26% -39%GS -6% -19% -24% -32% 3% -35% -37% -48% -59% -31% -31% -18% -32%HS 45% 22% 12% 0% 40% -33% -46% -46% -46% -1% -7% 18% -11%GSD -1% -12% -23% -29% -1% -15% -16% -32% -33% -28% -29% -12% -20%LLP 11% -6% -19% -17% 12% -5% -6% -26% -23% -22% -20% -4% -11%LIGHTING -43% -53% -62% -69% -51% -64% -60% -68% -66% -62% -63% -49% -59%TOTAL -1% -16% -27% -31% -3% -29% -31% -43% -45% -31% -33% -16% -27%
Month
Month
Month
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Chart 1Total Retail Revenue
with Marginal Cost Pricing
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
1 2 3 4 5 6 7 8 9 10 11 12
MONTH
DO
LL
AR
S (
TH
OU
SA
ND
S)
TRADITIONAL RATES
MARGINAL COST PRICING
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
TABLE 4 - RETAIL REVENUE FROM MARGINAL COST PRICING ($1,000) PLUS CUSTOMER CHARGES (COST OF SERVICE)LOAD SURVEY MWH (BY HOUR) x DECREMENTAL COST
Class 1 2 3 4 5 6 7 8 9 10 11 12 Grand TotalRES 4,938$ 3,842$ 2,963$ 2,470$ 4,159$ 4,306$ 5,453$ 4,158$ 3,758$ 2,543$ 2,862$ 4,231$ 45,683$ GS 1,481$ 1,222$ 1,150$ 1,032$ 1,564$ 1,538$ 1,662$ 1,344$ 1,279$ 1,041$ 1,028$ 1,331$ 15,673$ HS 293$ 217$ 132$ 92$ 149$ 147$ 170$ 136$ 131$ 94$ 117$ 216$ 1,894$ GSD 1,259$ 1,046$ 995$ 917$ 1,474$ 1,427$ 1,534$ 1,214$ 1,186$ 988$ 927$ 1,140$ 14,105$ LLP 3,627$ 3,035$ 2,996$ 2,836$ 4,303$ 4,174$ 4,247$ 3,470$ 3,366$ 3,043$ 2,853$ 3,275$ 41,226$ LIGHTING 150$ 128$ 116$ 103$ 117$ 101$ 109$ 103$ 108$ 118$ 119$ 143$ 1,414$ TOTAL 11,748$ 9,491$ 8,352$ 7,448$ 11,766$ 11,693$ 13,174$ 10,425$ 9,828$ 7,827$ 7,906$ 10,337$ 119,995$
TABLE 2 - RETAIL REVENUE FROM TRADITIONAL RATES ($1,000)LOAD SURVEY MWH x 2004 YIELDS
Class 1 2 3 4 5 6 7 8 9 10 11 12 Grand TotalRES 4,864$ 4,368$ 3,803$ 3,497$ 4,395$ 6,844$ 8,790$ 7,889$ 7,208$ 3,457$ 4,253$ 4,978$ 64,346$ GS 1,506$ 1,439$ 1,441$ 1,419$ 1,463$ 2,263$ 2,537$ 2,489$ 2,965$ 1,416$ 1,408$ 1,555$ 21,902$ HS 199$ 175$ 116$ 88$ 104$ 217$ 310$ 249$ 235$ 91$ 123$ 181$ 2,087$ GSD 1,270$ 1,181$ 1,288$ 1,293$ 1,481$ 1,683$ 1,816$ 1,789$ 1,768$ 1,371$ 1,309$ 1,295$ 17,544$ LLP 3,234$ 3,174$ 3,659$ 3,364$ 3,813$ 4,343$ 4,454$ 4,639$ 4,347$ 3,842$ 3,520$ 3,370$ 45,759$ LIGHTING 142$ 124$ 120$ 105$ 98$ 88$ 99$ 105$ 113$ 129$ 134$ 146$ 1,402$ TOTAL 11,215$ 10,460$ 10,427$ 9,766$ 11,355$ 15,437$ 18,006$ 17,160$ 16,635$ 10,306$ 10,747$ 11,524$ 153,040$
TABLE 5 - RETAIL REVENUE COMPARISONS
Class 1 2 3 4 5 6 7 8 9 10 11 12 Grand TotalRES 2% -12% -22% -29% -5% -37% -38% -47% -48% -26% -33% -15% -29%GS -2% -15% -20% -27% 7% -32% -34% -46% -57% -26% -27% -14% -28%HS 47% 24% 14% 4% 44% -32% -45% -45% -44% 3% -5% 19% -9%GSD -1% -11% -23% -29% -1% -15% -15% -32% -33% -28% -29% -12% -20%LLP 12% -4% -18% -16% 13% -4% -5% -25% -23% -21% -19% -3% -10%LIGHTING 6% 3% -4% -2% 20% 15% 10% -2% -4% -9% -11% -2% 1%TOTAL 5% -9% -20% -24% 4% -24% -27% -39% -41% -24% -26% -10% -22%
Month
Month
Month
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Chart 2Total Retail Revenue
with Marginal Costs plus Customer Charge
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
1 2 3 4 5 6 7 8 9 10 11 12
MONTH
DO
LL
AR
S (
TH
OU
SA
ND
S)
TRADITIONAL RATES
MARGINAL COST PRICING
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
TABLE 6 - RETAIL REVENUE FROM MARGINAL COST PRICING ($1,000) PLUS CUSTOMER AND FACILITIES CHARGES (COST OF SERVICE)LOAD SURVEY MWH (BY HOUR) x DECREMENTAL COST
Class 1 2 3 4 5 6 7 8 9 10 11 12 Grand TotalRES 5,304$ 4,210$ 3,331$ 2,839$ 4,528$ 4,676$ 5,823$ 4,529$ 4,130$ 2,915$ 3,234$ 4,605$ 50,124$ GS 1,733$ 1,475$ 1,404$ 1,285$ 1,818$ 1,792$ 1,917$ 1,599$ 1,534$ 1,295$ 1,282$ 1,588$ 18,723$ HS 310$ 233$ 149$ 109$ 165$ 164$ 186$ 153$ 148$ 110$ 134$ 233$ 2,093$ GSD 1,477$ 1,266$ 1,208$ 1,137$ 1,716$ 1,675$ 1,787$ 1,477$ 1,441$ 1,234$ 1,150$ 1,361$ 16,930$ LLP 4,177$ 3,589$ 3,551$ 3,426$ 4,913$ 4,811$ 4,895$ 4,149$ 4,047$ 3,712$ 3,491$ 3,879$ 48,642$ LIGHTING 152$ 130$ 117$ 104$ 119$ 102$ 110$ 104$ 109$ 120$ 121$ 145$ 1,434$ TOTAL 13,152$ 10,902$ 9,761$ 8,900$ 13,259$ 13,220$ 14,719$ 12,011$ 11,410$ 9,387$ 9,413$ 11,812$ 137,945$
TABLE 2 - RETAIL REVENUE FROM TRADITIONAL RATES ($1,000)LOAD SURVEY MWH x 2004 YIELDS
Class 1 2 3 4 5 6 7 8 9 10 11 12 Grand TotalRES 4,864$ 4,368$ 3,803$ 3,497$ 4,395$ 6,844$ 8,790$ 7,889$ 7,208$ 3,457$ 4,253$ 4,978$ 64,346$ GS 1,506$ 1,439$ 1,441$ 1,419$ 1,463$ 2,263$ 2,537$ 2,489$ 2,965$ 1,416$ 1,408$ 1,555$ 21,902$ HS 199$ 175$ 116$ 88$ 104$ 217$ 310$ 249$ 235$ 91$ 123$ 181$ 2,087$ GSD 1,270$ 1,181$ 1,288$ 1,293$ 1,481$ 1,683$ 1,816$ 1,789$ 1,768$ 1,371$ 1,309$ 1,295$ 17,544$ LLP 3,234$ 3,174$ 3,659$ 3,364$ 3,813$ 4,343$ 4,454$ 4,639$ 4,347$ 3,842$ 3,520$ 3,370$ 45,759$ LIGHTING 142$ 124$ 120$ 105$ 98$ 88$ 99$ 105$ 113$ 129$ 134$ 146$ 1,402$ TOTAL 11,215$ 10,460$ 10,427$ 9,766$ 11,355$ 15,437$ 18,006$ 17,160$ 16,635$ 10,306$ 10,747$ 11,524$ 153,040$
TABLE 7 - RETAIL REVENUE COMPARISONS
Class 1 2 3 4 5 6 7 8 9 10 11 12 Grand TotalRES 9% -4% -12% -19% 3% -32% -34% -43% -43% -16% -24% -7% -22%GS 15% 3% -3% -9% 24% -21% -24% -36% -48% -9% -9% 2% -15%HS 55% 33% 29% 23% 60% -24% -40% -38% -37% 21% 9% 29% 0%GSD 16% 7% -6% -12% 16% 0% -2% -17% -19% -10% -12% 5% -4%LLP 29% 13% -3% 2% 29% 11% 10% -11% -7% -3% -1% 15% 6%LIGHTING 7% 5% -3% -1% 21% 16% 11% -1% -3% -7% -9% 0% 2%TOTAL 17% 4% -6% -9% 17% -14% -18% -30% -31% -9% -12% 2% -10%
Month
Month
Month
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial ConferencePortland, Oregon, September 26, 2005
TABLE 6 - RETAIL REVENUE FROM MARGINAL COST PRICING ($1,000) PLUS CUSTOMER AND FACILITIES CHARGES (COST OF SERVICE)LOAD SURVEY MWH (BY HOUR) x DECREMENTAL COST
Class 1 2 3 4 5 6 7 8 9 10 11 12 Grand TotalRES 5,304$ 4,210$ 3,331$ 2,839$ 4,528$ 4,676$ 5,823$ 4,529$ 4,130$ 2,915$ 3,234$ 4,605$ 50,124$ GS 1,733$ 1,475$ 1,404$ 1,285$ 1,818$ 1,792$ 1,917$ 1,599$ 1,534$ 1,295$ 1,282$ 1,588$ 18,723$ HS 310$ 233$ 149$ 109$ 165$ 164$ 186$ 153$ 148$ 110$ 134$ 233$ 2,093$ GSD 1,477$ 1,266$ 1,208$ 1,137$ 1,716$ 1,675$ 1,787$ 1,477$ 1,441$ 1,234$ 1,150$ 1,361$ 16,930$ LLP 4,177$ 3,589$ 3,551$ 3,426$ 4,913$ 4,811$ 4,895$ 4,149$ 4,047$ 3,712$ 3,491$ 3,879$ 48,642$ LIGHTING 152$ 130$ 117$ 104$ 119$ 102$ 110$ 104$ 109$ 120$ 121$ 145$ 1,434$ TOTAL 13,152$ 10,902$ 9,761$ 8,900$ 13,259$ 13,220$ 14,719$ 12,011$ 11,410$ 9,387$ 9,413$ 11,812$ 137,945$
TABLE 2 - RETAIL REVENUE FROM TRADITIONAL RATES ($1,000)LOAD SURVEY MWH x 2004 YIELDS
Class 1 2 3 4 5 6 7 8 9 10 11 12 Grand TotalRES 4,864$ 4,368$ 3,803$ 3,497$ 4,395$ 6,844$ 8,790$ 7,889$ 7,208$ 3,457$ 4,253$ 4,978$ 64,346$ GS 1,506$ 1,439$ 1,441$ 1,419$ 1,463$ 2,263$ 2,537$ 2,489$ 2,965$ 1,416$ 1,408$ 1,555$ 21,902$ HS 199$ 175$ 116$ 88$ 104$ 217$ 310$ 249$ 235$ 91$ 123$ 181$ 2,087$ GSD 1,270$ 1,181$ 1,288$ 1,293$ 1,481$ 1,683$ 1,816$ 1,789$ 1,768$ 1,371$ 1,309$ 1,295$ 17,544$ LLP 3,234$ 3,174$ 3,659$ 3,364$ 3,813$ 4,343$ 4,454$ 4,639$ 4,347$ 3,842$ 3,520$ 3,370$ 45,759$ LIGHTING 142$ 124$ 120$ 105$ 98$ 88$ 99$ 105$ 113$ 129$ 134$ 146$ 1,402$ TOTAL 11,215$ 10,460$ 10,427$ 9,766$ 11,355$ 15,437$ 18,006$ 17,160$ 16,635$ 10,306$ 10,747$ 11,524$ 153,040$
TABLE 7 - RETAIL REVENUE COMPARISONS
Class 1 2 3 4 5 6 7 8 9 10 11 12 Grand TotalRES 9% -4% -12% -19% 3% -32% -34% -43% -43% -16% -24% -7% -22%GS 15% 3% -3% -9% 24% -21% -24% -36% -48% -9% -9% 2% -15%HS 55% 33% 29% 23% 60% -24% -40% -38% -37% 21% 9% 29% 0%GSD 16% 7% -6% -12% 16% 0% -2% -17% -19% -10% -12% 5% -4%LLP 29% 13% -3% 2% 29% 11% 10% -11% -7% -3% -1% 15% 6%LIGHTING 7% 5% -3% -1% 21% 16% 11% -1% -3% -7% -9% 0% 2%TOTAL 17% 4% -6% -9% 17% -14% -18% -30% -31% -9% -12% 2% -10%
Month
Month
Month
Chart 3Total Retail Revenue
with Marginal Costs plus Customer and Demand Charges
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
1 2 3 4 5 6 7 8 9 10 11 12
MONTH
DO
LL
AR
S (
TH
OU
SA
ND
S)
TRADITIONAL RATES
MARGINAL COST PRICING
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Chart 42004 Average Marginal Cost
0
5
10
15
20
25
30
35
40
45
50
55
60
65
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
HOUR ENDING
$ /
MW
H
JAN APR JUL OCT
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Chart 52004 Average Marginal Cost
0
5
10
15
20
25
30
35
40
45
50
55
60
65
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
HOUR ENDING
$ /
MW
H
SUM WIN
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Average Generation Costs by Season
Average Generation Costs by Season
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Marginal Energy Costs by Season
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Marginal Energy Costs and Average Generation Costs by
Season
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Average Generation Costs by Month
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Marginal Energy Costs by Month
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Marginal Energy Costs and Average Generation Costs by Month
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue from Marginal Energy Costs
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer Charges
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer and Demand Charges
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer and Demand Charges
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer and Demand Charges
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer and Demand Charges
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer and Demand Charges
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer and Demand Charges
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer and Demand Charges
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Time-Of-Use Rate Periods
Peak Period
Off-Peak
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue from Marginal Energy Costs
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue from Marginal Energy Costs
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue from Marginal Energy Costs
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue from Marginal Energy Costs
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue from Marginal Energy Costs
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue from Marginal Energy Costs
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer Charges
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer Charges
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer Charges
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer Charges
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer Charges
Credit: Richard Andrysik, Lincoln Electric System Marginal Cost Pricing Study, APPA Business & Financial Conference
Portland, Oregon, September 26, 2005
Revenue From Marginal Energy Costs Plus Customer Charges
Chart #
Estimated Power Supply Revenues with Average Costs and Marginal Cost Pricing
0
2000
4000
6000
8000
10000
12000
14000
1 2 3 4 5 6 7 8 9 10 11 12
Month
Do
llar
s (t
ho
usa
nd
s)
Average Cost Pricing
Marginal Cost Pricing
Chart #Estimated Average Hourly Revenues with Average Costs and Marginal Cost
Pricing, Year 2004
0
5
10
15
20
25
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 0
Hour
Do
llar
s (t
ho
usa
nd
s)
Marginal Cost Pricing
Average Cost Pricing
Chart #Estimated Average Hourly Revenues by Season (December, January,
February), with Average Costs and Marginal Costs Pricing
0
50
100
150
200
250
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 0
Hour
Do
llar
s (t
ho
usa
nd
s)
Marginal Cost Pricing
Average Cost Pricing
Chart #Estimated Average Hourly Revenues by Season (March, April, May), with
Average Costs and Marginal Cost Pricing
0
20
40
60
80
100
120
140
160
180
200
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 0
Hour
Do
lla
rs (
tho
us
an
ds
)
Marginal Cost Pricing
Average Cost Pricing
Chart #Estimated Average Hourly Revenues by Season (June, July, August), with
Average Costs and Marginal Cost Pricing
0
5
10
15
20
25
30
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 0
Hour
Do
llar
s (t
ho
usa
nd
s)
Marginal Cost Pricing
Average Cost Pricing
Chart #Estimated Average Hourly Revenues by Season (September, October,
November), with Average Costs and Marginal Cost Pricing
0
2
4
6
8
10
12
14
16
18
20
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 0
Hour
Do
llar
s (t
ho
usa
nd
s)
Marginal Cost Pricing
Average Cost Pricing