Electric utility expansion planning: A multiperiod policy model with uncertainty

In this dissertation we address the simplifying assumptions of a single period planning horizon and uncertainties in demand and fuel prices. Using a single period model ignores the changing economics of the different plant types over time as demands and fuel prices fluctuate. We present a simplified solution algorithm for the deterministic multiperiod model. Through the Karush-Kuhn-Tucker conditions for the multiperiod model, we use the property that for any equipment type j where capacity is added, the capital cost plus the marginal operating savings is equal to the dual variable. The net present value must equal the capital cost for an investment. The algorithm we present is a specialization of the reduced gradient algorithm.;Our approach to modeling demand and fuel cost uncertainty uses the scenario approach in stochastic programming combined with marginal analysis. Of special interest are the calculations of dual variables and marginal costs. The scenarios consist of all possible realizations of demands from periods one through t. Each scenario is described by a set of parameters of demand and fuel costs with an assigned probability. The problem is to determine a first period decision that minimizes the sum of current costs and the expected values of all future costs until T.;We present the outcomes as an event tree where a decision x...