Question: An electric utility is experiencing a difficult time obtaining natural gas for electric generation. Fuels other than natural gas (called fuel-mixes) are purchased at an
An electric utility is experiencing a difficult time obtaining natural gas for electric generation. Fuels other than natural gas (called fuel-mixes) are purchased at an extra cost, which is transferred to the customer. Total monthly fuel expenses are now averaging exist7, 750,000. An engineer with the city-owned utility has calculated the average revenue for the past 24 months using three fuel-mix situations - Gas Plentiful = 30% other fuels purchased The table below indicates the number of months that each fuel-mix situation occurred (i.e. Gas Plentiful occurred 12 out of the last 24 months). Can the utility expect to meet future monthly expenses based on the 24 months of data, if a similar fuel-mix pattern continues? (i.e. what is the expected EMV?) You can use Excel or do this by hand
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
