Abstract
There exists the possibility of interfuel substitution in the generation of electrical energy. The responsiveness of the demand for various fossil fuels by electric utilities, given this economic fact, is investigated. Using aggregate time series data, the results indicate that the responsiveness of the demand for coal, oil, and natural gas by electric utilities to relative price changes is significant. As expected, the demand for fossil fuel increases as the level of generation expands, with the impact being proportionally spread over the fossil fuels. A most interesting result is the negative response of the demand for natural gas by electric utilities to changes in weather conditions. The probable reason for this is that electric utilities, based on current regulatory practices, are among the first to be curtailed should any supply short-fall occur.
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