1 U.S. Department of Energy, Supporting Analysis for the Comprehensive Electricity Competition Act, DOE/PO-0059 (Washington, DC, May 1999).

2 POEMS actually uses the short-run operating costs of the first plant not dispatched. This approach is what is referred to as a second price auction.

3 In both NEMS and POEMS it is assumed that over typical operating ranges the heatrates (thermal efficiencies) of plants are constant. In addition, it is assumed that at any given point in time plants are dispatched in merit order (from least cost to highest cost) until the demand for electricity is met. With these assumptions, marginal costs can be defined as the change in total cost associated with the last plant utilized at any point in time.

4 The competitive pricing algorithms used by POEMS and NEMS are explained in more detail in Chapter 3.

5 The loss factors used in AEO99, based on earlier data, were slightly higher.

6 The POEMS results in 2015 exceed the required 7.5-percent share because the Supporting Analysis assumed that green power programs would stimulate renewable development (0.3 percent of sales) independent of the RPS requirement. NEMS does not include this assumption.