Evaluation of retail electricity supply contracts in deregulated environment

In this paper, the authors introduce a procedure to evaluate electricity supply contracts for retail consumers who have a choice of retail supply offers under a deregulated environment. A long-term contract to supply power at a fixed price will be attractive to some consumers, while the spot price in a power exchange market may go up unreasonably. In this approach, an index is introduced to reflect the consumer´s preference for a low price with some margins. Uncertain market prices are estimated by an extended regression model that considers the possible ranges of prices. The differences in the offered price for a supply contract and the market prices are then compared with the preference index. The overall grade of matching the price differential and the consumer´s preference indicates the value of the offered price for the transaction. Numerical examples using California Power Exchange data are illustrated.