Umudike Journal of Engineering and Technology

Michael Okpara University of Agriculture, Umudike


Oputa, O.
Department of Electrical/Electronics Engineering, Michael Okpara University of Agriculture, Umudike, Nigeria


The electric power sector may be aimed at making life meaningful and comfortable for man, but making profit while this is being done cannot be exempted.  It is important for the bulk seller of electric energy to know the best tariff that can guarantee making a specific expected profit from the very start of the business to its end. This paper shall develop a mathematical model the bulk electricity seller can use in fixing a two-part tariff that will be generate this. The model developed a tariff plan that is ascending as the business progresses as long as the plant efficiency or load factor remains the same. This model reveal how a power plant of 470MW capacity and $480 million installation cost with a life span of 42 years and a targeted $24 million profit can be archived by using a two-part tariff of $5.9770/kWh and $0.0018/kWh as variable and fixed tariff respectively for the first to three years of plant life time; and $6.0866/kWh and $0.00666/kWh also as variable and fixed tariff respectively between the 28th to 30th year of the business.

Keywords: Model Fixing, Two-Part Tariff

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Friday, December 18, 2015

Vol. 1 No. 2, DEC 2015

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