A B C D E F G H I

1 Electricity pricing model

2
3 Input data Range names used:
4 Coefficients of demand functions Capacity =Model!$B$15
5 Constant On-peak price Off-peak price Common_Capacity =Model!$B$21:$C$21
6 On-peak demand 2.253 -0.017 0.003 Demands =Model!$B$19:$C$19
7 Off-peak demand 1.142 0.005 -0.020 Prices =Model!$B$13:$C$13
8 Profit =Model!$B$26
9 Cost of capacity/mWh $75
10
11 Decisions
12 On-peak Off-peak
13 Price per mWh $106.10 $53.19
14 The prices
The prices decrease,
decrease, capacity
capacity decreases,
decreases, andand
profit decreases.
profit decreases. Evidently,
Evidently, the
the larger
larger negative
negative
15 Capacity (millions of mWh) 0.609 numbers in
numbers in the
the demand
demandfunctions
functions induce
induce the
the
16 company to
company to have
havelower
lower prices
prices to
tokeep
keep from
from
17 Constraints on demand (in millions of mWh) hurting demand
hurting demand forfor the
the products.
products. The
The net
net
18 On-peak Off-peak effect isis somewhat
effect somewhat lower
lower demand
demand and and much
much
less revenue
less revenueand andprofit.
profit.
19 Demand 0.609 0.609
20 <= <=
21 Capacity 0.609 0.609
22
23 Monetary summary ($ millions)
24 Revenue 96.974
25 Cost of capacity 45.658
26 Profit 51.315
 A B C D E F G H I
1 Electricity pricing model
2
3 Input data Range names used:
4 Coefficients of demand functions Capacity =Model!$B$15
5 Constant On-peak price Off-peak price Common_Capacity =Model!$B$21:$C$21
6 On-peak demand 2.253 -0.013 0.005 Demands =Model!$B$19:$C$19
7 Off-peak demand 1.142 0.007 -0.015 Prices =Model!$B$13:$C$13
8 Profit =Model!$B$26
9 Cost of capacity/mWh $75
10
11 Decisions
12 On-peak Off-peak
13 Price per mWh $156.09 $100.54
14 The prices
The prices increase,
increase, capacity
capacity increases,
increases, and and
profit increases.
profit increases. Evidently,
Evidently, the
the larger
larger positive
positive
15 Capacity (millions of mWh) 0.727 numbers in in the
the demand
demand functions
functions induce
induce the
the
numbers
16 company to
company to have
havehigher
higher prices
prices to to create
create more
more
17 Constraints on demand (in millions of mWh) demandfor
demand for the
the opposite
opposite products.
products. The The net
net
18
effect isis somewhat
effect somewhat higher
higher demand
demandfor for both
both
On-peak Off-peak products and and much
much more
morerevenue
revenue and and profit.
profit.
products
19 Demand 0.727 0.727
20 <= <=
21 Capacity 0.727 0.727
22
23 Monetary summary ($ millions)
24 Revenue 186.449
25 Cost of capacity 54.489
26 Profit 131.960
 A B C D E F G H I
1 Electricity pricing model
2
3 Input data Range names used:
4 Coefficients of demand functions Capacity =Model!$B$15
5 Constant On-peak price Off-peak price Common_Capacity =Model!$B$21:$C$21
6 On-peak demand 2.253 -0.017 0.005 Demands =Model!$B$19:$C$19
7 Off-peak demand 1.142 0.007 -0.020 Prices =Model!$B$13:$C$13
8 Profit =Model!$B$26
9 Cost of capacity/mWh $75
10
11 Decisions
12 On-peak Off-peak
13 Price per mWh $113.70 $64.71
14 Theeffect
The effectofofmore
morenegative
negativecoefficients
coefficients
appearsto
appears todominate
dominatethe
theeffect
effectof
ofmore
more
15 Capacity (millions of mWh) 0.644 positivecoefficients.
positive coefficients.The
Theresults
resultsare
are
16 much like in part
much like in part a.a.
17 Constraints on demand (in millions of mWh)
18 On-peak Off-peak
19 Demand 0.644 0.644
20 <= <=
21 Capacity 0.644 0.644
22
23 Monetary summary ($ millions)
24 Revenue 114.838
25 Cost of capacity 48.276
26 Profit 66.562