Modelling regional end user price/cost relationships in a widespread interconnected power system

A combined programming and regression modelling approach is developed to analyse regional retail price/cost relationships for a widespread interconnected power system characterised by low population density and uniform (regulated) retail tariffs. The programming model is designed to calculate on the hour the delivered cost of electricity from 5 thermal power stations and one pumped storage hydrostation to end users in 8 distribution regions. A simultaneous equation regression model then analyses the link between retail prices charged end users, regional demand and supply characteristics, industry financial objectives and departures from economically efficient pricing. The electricity supply industry in Queensland Australia is used as a framework.