The Price of Electricity from Private Power Producers

TitleThe Price of Electricity from Private Power Producers
Publication TypeReport
LBNL Report NumberLBNL-36054
Year of Publication1993
AuthorsKahn, Edward P., Adele Milne, and Suzie M. Kito
Date Published10/1993
Keywordselectricity markets and policy group, energy analysis and environmental impacts department

The long-term wholesale electricity market is becoming increasingly competitive. Bidding for power contracts has become a dominant form of competition in this sector. The prices which emerge from this process have not been documented and compared in a systematic framework. This paper introduces a method to make such comparisons and illustrates it on a small sample of projects. The results show a wide range of prices for what is essentially the same technology, gas-fired combined cycle generation. The price range seems greater than what could be explained by transmission cost differences between high and low cost regions. For the smaller sample of coal-fired projects, price variation is substantially less. Further data collection and analysis should be able to help isolate more clearly what market or cost factors are responsible for the observed variation.

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