The purpose of this article is to evaluate and compare the incremental cost of purchased power from non-utility generators versus utility built generation considering a variety of contracts for energy purchases. Four types of contracts are evaluated: I) Flat Rate Produce and Pay, 2)...

Economic theory gives no clear indication of the minimum number of producers necessary for a market to define competitive price-quantity equilibria which approximate price equal to marginal cost. Previous work and FERC Guidelines generally suggest that 6 to 10 generators may be workably...