Publication Date: March 1957
This paper deals with an electricity generating system that combines one hydroelectric reservoir and generating plant with unlimited thermal generating capacity operating at increased incremental cost. It constructs a water storage policy that minimizes the operating cost of thermal generation over the planning period while meeting a prescribed demand for power given as a function of time. Associated with this policy are valuations (“eﬀiciency prices”) imputed to the power generated and the water used and (“eﬀiciency rents”) to the use of reservoir and turbine capacities. These valuations, which vary over time, can be used in coordinating the operation of diﬀerent generating systems, in electricity rate making, and in designing new systems or modifying existing ones. It is hoped that the methods developed can be extended beyond present simplifying assumptions: that future power demand and water inflow to the reservoir are known with certainty, and that the eﬀect of variation in the head of water can be ignored.
See CFP: 115