Examining and Estimating Power Plant Operations and Maintenance (O&M) Costs

• Activity Number: 231
• Type: Topic Contributed
• Date/Time: Monday, August 5, 2013 : 2:00 PM to 3:50 PM
• Sponsor: Survey Research Methods Section
• Author(s): Cha-Chi Fan*+
• Companies: U.S. Energy Information Administration

Abstract

Power plant operations and maintenance (O&M) costs reflect the competition ability of electricity providers to economically generate electricity and the O&M costs impact the dispatch decisions to meet the electricity demand. Multiple boosted regression models are constructed to examine the marginal effects of power plant characteristics and operational status on their O&M costs and to estimate the non-samples. We examine the O&M cost data from the regulated electricity providers collected by FERC and from the rural electricity cooperatives collected by USDA. We find that different fuel types and technologies have apparent different O&M cost behaviors and separate models are necessary for different subgroups. One challenge that we encounter is that the data used for model construction is at an aggregated level and the outcome to be estimated is at an individual generating unit level. In order to ensure that the models are applicable to unit-level estimations, we validate the models with the same aggregate data used for model construction but at a unit level. The results show that although the model fitted values tend to underestimate the costs, the unit estimates are less biased.