GAME-THEORY APPROACH TO USE OF NONCOMMERCIAL POWER-PLANTS UNDER TIME-OF-USE PRICING

There has been such research done on pricing theories for electric power Utilities study. One of the well-known methodologies for pricing is Time Of Use Pricing(TOUP). Current investigations on this pricing theory are based on the implicit assumption that the customers have no option but to purchase electricity from the utility company. However, new power generation techniques are beginning to reveal the invalidity of this assumption. Many customers are now able to use their own Non-Commercial Power plants (NCP) . NCP give customers the alternative to either purchase electricity from the utility company or to generate it by themselves. This alternative can lead them to enter into price negotiations with the utility company, or put political pressure upon the pricing process. This paper employs the game theory approach for evaluating the impact of the introduction of customer owned NCP upon the pricing process when TOUP Is used. We have derived various interesting results from this analysis some of which are; the conflict between NCP customers and the supplier forces the supplier reduce the price for NCP customers, also perception of the situation in which they are involved plays an important role in this conflict. The game model analysis presented in this paper provides us detailed quantitative Information on electricity prices and on the ways of using NCP.