Homework__5

Homework__5 - Management Science & Engineering 369 Homework...

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Spring, 2008 Homework #5 Due: Beginning of class, May 13 1. Flex quantity contracts for electricity Not long ago all electricity markets were regulated. Utilities, as monopoly suppliers in their geographic regions, were obligated to meet all of their customers’ requirements, and charged prices set by regulators. In many areas electricity markets are now at least partially deregulated. A common model is for commercial and industrial customers to buy power at market prices, while residential customers continue to buy from their local utility at a fixed price. Imagine you are the manager of a utility, and deregulation has just been proposed for your region. Your company has long term flex quantity, fixed price contracts in place with many local commercial and industrial customers. As part of the deregulation process, some of these customers have asked that their contracts be voided, since they believe prices will drop after deregulation. a)
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This note was uploaded on 06/16/2010 for the course MS&E 369 taught by Professor Blakejohnson during the Spring '08 term at Stanford.

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Homework__5 - Management Science & Engineering 369 Homework...

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