An Application of Quadratic Programming to Electrical Energy Production

The issue that is addressed concerns the potential cost savings to a portion of the United States if the economic advantages some regions possess in generating electrical energy are passed on to other regions. The basic conclusions include the argument that a misallocation of electrical energy among consumer sectors exists, that societal welfare could be increased if the industry were to operate from an aggregate power-system viewpoint, and finally that the industry, in the aggregate, is charging a price in excess of the marginal cost of supplying electrical energy.