# Peakload - 27.50 Monetary summary Revenue \$2,477.30 Cost of...

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PEAK-LOAD PRICING AT FLORIDA POWER AND LIGHT Florida Power and Light (FPL) faces demands during both peak-load and off-peak- load times. FPL must determine the price per kilowatt hour (kwh) to charge during both peak and off-peak periods. The daily demand for power during each period (in kwh) is related to price as follows: Dp=60-0,5Pp+0,1Po Do=40-Po+0,1Pp Here, Dp and Pp are demand and price during peak times, whereas Do and Po are demand and price during off-peak times.It costs FPL \$10 per day to maintain 1 kwh of capacity. The company wants to determine a pricing strategy and capacity level that maximize its daily profit.

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Exhibit 9 Input data Coefficients of demand functions Constant Peak price Off-peak price Peak-load demand 60 -0.5 0.1 Off-peak demand 40 0.1 -1 Cost of capacity/kwh \$10 Decisions Peak-load Off-peak Prices \$70.31 \$26.53 Capacity 27.50 Constraints on demand Peak-load Off-peak Demand 27.50 20.50 <= <= Capacity 27.50
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Unformatted text preview: 27.50 Monetary summary Revenue \$2,477.30 Cost of capacity \$275.00 Profit \$2,202.30 Sensitivity of changing cells and profit to cost of capacity Unit cost Peak price Off-peak price Capacity Profit \$B\$13 \$C\$13 \$B\$15 \$B\$26 \$5 \$67.81 \$26.53 28.75 \$2,342.92 \$6 \$68.31 \$26.53 28.50 \$2,314.30 \$7 \$68.81 \$26.53 28.25 \$2,285.92 \$8 \$69.31 \$26.53 28.00 \$2,257.80 \$9 \$69.81 \$26.53 27.75 \$2,229.92 \$10 \$70.31 \$26.53 27.50 \$2,202.30 \$11 \$70.81 \$26.53 27.25 \$2,174.92 \$12 \$71.31 \$26.53 27.00 \$2,147.80 \$13 \$71.81 \$26.53 26.75 \$2,120.92 \$14 \$72.31 \$26.53 26.50 \$2,094.30 \$15 \$72.81 \$26.53 26.25 \$2,067.92 Range names used: PLConst - B6 PLCoeffs - C6:D6 OPConst - B7 OPCoeffs - C7:D7 UnitCost - B9 Prices - B13:C13 Capacity - B15 Demands - B19:C19 Capacities - B21:C21 Revenue - B24 Cost - B25 Profit - B26 A B C D E F G H 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41...
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Peakload - 27.50 Monetary summary Revenue \$2,477.30 Cost of...

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