Applications of option valuation techniques to utility decision making: A case study with New England Power Service. Final report

Technical Report · Tue Nov 01 00:00:00 EST 1994

OSTI ID:33155

Option valuation techniques -- a recent synthesis of ideas from the finance and decision analysis communities -- can help utilities quantify the value of their flexible investments in an increasingly competitive electric utility market environment. Application of option valuation techniques in a New England Power Service case study revealed insights into the relative value of an option on a transaction compared to a current commitment to a transaction, and the sensitivity of results to a variety of parameters including pricing structure. This report reviews some of the most common option valuation techniques and demonstrates their application to a bulk power contract.

• Research Organization: Electric Power Research Inst. (EPRI), Palo Alto, CA (United States); Synergic Resources Corp., Oakland, CA (United States)
• Sponsoring Organization: Electric Power Research Inst., Palo Alto, CA (United States)
• OSTI ID: 33155
• Report Number(s): EPRI-TR-104579
• Resource Relation: Other Information: PBD: Nov 1994
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING AND POLICY
99 MATHEMATICS
COMPUTERS
INFORMATION SCIENCE
MANAGEMENT
LAW
MISCELLANEOUS
ELECTRIC UTILITIES
MANAGEMENT
DECISION MAKING
PRICES
FINANCING
ECONOMICS
MATHEMATICAL MODELS
MARKETING RESEARCH