Abstract
To make more efficient electric energy supply system, deregulation in power system is being brought into practice in various country. For example, Independent Power Producers (IPP), combined with wheeling, are introduced into power system. New strategy for utility decision maker should be introduced to cope with new situation.
In this paper, the price difference model, which represent a power system with IPP, is developed. The pricing strategy for power producers (including utility and IPP) is analyzed using game theory. As a result, it is made clear that the pricing strategy for utility must be chosen carefully considering consumer surplus. Also, since wheeling charge has a great effect on consumer surplus, it may not be taken as a strategic variable of utility.
