Abstract
Building upon conventional activity analysis models of electric power supply, this paper presents a nonlinear programming model for endogenous determination of electrical energy prices, supplies, and capacity expansion increments, for use as a tool in quantifying intertemporal tradeoffs for an electric utility among prices and supplies and improved environmental quality or diminished production hazard. For illustrative purposes the model is applied to a Canadian electric utility to trace the price and supply consequences of foregoing an attractive hydro alternative with undesirable externalities and hypothetical legislation requiring the reclamation of certain land to be surface-mined in the future for lignite coal.
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