ABSTRACT
Long-run marginal cost, in present worth terms, is simply the present worth of all system costs as they will be with the increment in load which is to be costed, less what they would be without that increment. The interest of long-run marginal cost stems from its relevance to tariffs. The size of load increment which needs to be costed is therefore the load of a single customer or a variation in the load of an individual existing consumer, since tariffs affect each consumer individually. A complication which has been skimmed over so far is that the availability of plant at peak times is different from its availability at other times. Leaving aside stochastic fluctuations in forced outages, this is because planned outages for maintenance are naturally concentrated into the months of the year when load is low. The system existing at any moment of time is inherited from the past.
