Variations in area- and time-specific marginal capacity costs of electricity distribution

Abstract

Marginal costs of electricity vary by time and location. Past researchers attributed these variations to factors related to electricity generation and transmission. Those authors, however, did not fully analyze the large variations in marginal distribution capacity costs (MDCC) by area and time. Thus, the objectives of this paper are: (1) to propose a method to estimate MDCC; (2) to demonstrate the significant intra- and inter-utility variations in MDCC; and (3) to discuss the usefulness of these cost estimations in integrated resource planning.