| This study, in its first part, explores the basic parameters of a power market in a utility district. The analysis of this market, naturally, includes a demand and a supply side and the interactions between the two. The econometric model is built to simulate the system of operations of one specific utility company, namely NYSEG (New York State Electric & Gas Corporation), one of seven major Investor-Owned-Utility Companies in New York State. The company serves about 17,000 square miles, or more than one third of the state's land, and one tenth of its population. The study uses time-series data covering 1960 to 1994 for more than fifty variables.; The econometric analysis performs both single equation and system estimations and yields short-run vs. long-run and direct vs. total elasticity estimates, which are crucial for any producer in the market place.; In the second part of this research, an optimal control procedure is used to evaluate NYSEG's investment policies retrospectively. For control calculations, a simplified linear version of the system of equations is used. Due to its constrained nature (both by being linear and having low degrees of freedom), the optimal control component mainly serves as an educational tool in microeconomic modeling.; Lastly, we performed Exploratory Data Analysis for the data we employed. This was done to justify the use of certain parametric test procedures performed in the process basically by checking whether the implicit assumptions of normality and the randomness hold. |
