A Profit Control in the Public-Service Corporation by Stabilizing the Service-Load: A Non-Cooperative Game Theoretic Approach to the Deregulated Power Company

Abstract

A profit control in the public-service corporation is different from that in other industries in some respects.

1) Stabilizing the service-load directly contributes to reducing the cost, increasing the profit, and decreasing the service price.

2) Inflexible regulated service price (User’s Cost of Service) and high exit barrier of the service users because of the expensive initial equipment cost.

3) Conflict between service price and social service cost.

In this paper we analyze the profit control in a power company by taking advantage of distributed peak load hours between the company and a gas company. We propose that a power company should subsidize the gas-air-conditioner to stabilize the air-conditioned load for commercial buildings whose regulated rate is cheaper than its marginal service cost.

This paper introduces a non-cooperative game theoretic approach to model and design the subsidy system. We found that a power company could achieve larger potential profit if they subsidize the gas-air-conditioned equipment.