A marginal cost-based electricity tariff for the Mindanao power grid

Benolerao, Vicente Dy

A marginal cost-based electricity tariff for the Mindanao power grid - Bangkok : Asian Institute of Technology, 1985 - 87 p. - Thesis ; no. ET-85-3 . - Asian Institute of Technology. Thesis ; no. ET-85-3 .

A thesis submitted in partial fulfillment of requirements for the degree of Master of Engineering, School of Environment, Resources and Development

Thesis (M.Eng.) - Asian Institute of Technology, 1985

The use of marginal cost analysis offers an alternative approach in formulating an pricing policy for the supply of electricity. Traditional approaches deal in historical investments attributed to electricity supply; the marginal cost approach provides a pricing policy that is based on future investments necessary to meet an incremental demand in capacity and energy. The study estimates the marginal cost structure for the Mindanao Power Grid of the National Power Corporation in the Philippines. It shows that present pricing policy does not approximate costs of future capacity additions necessary to maintain a reliable service. Likewise, the disparity in the supply cost of electricity at peak and off-peak periods requires the adoption of a time of day tariff that promises to ensure an efficient utilization of the resource.


Electricity--Economic aspects
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