Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. suppose that firm a is located in philadelphia, an

Suppose that Firm A is located in Philadelphia, and buys 100 MW of power from...

60.1K

Verified Solution

Question

Accounting

Suppose that Firm A is located in Philadelphia, and buys 100 MW of power from Firm B, who is located in State College. The contract is bilateral, but all the physical energy is bid into the PJM energy market; thus Firm A winds up paying the Philadelphia LMP for the 100 MW consumed and Firm B receives the State College LMP for the 100 MW produced. Suppose that Firms A and B sign a two-way CFD at a strike price of $30/MWh. Suppose also that Firm B has a 10 MW Financial Transmission Right from State College to Philadelphia (i.e., the source node for the FTR is State College and the sink node is Philadelphia). Show that Firm B's revenues are equal to $3000 and Firm A's costs are equal to $3000.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students