An old 100-mw power plant has a heat rate of 13 000 btukwh, Business Economics

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An old 100-mw power plant has a heat rate of 13 000 btukwh

An old 100-MW power plant has a heat rate of 13 000 Btu/kWh and burns a fuel that costs 2.90 $/MBtu. The owner of the plant estimates the fixed cost of keeping the plant available at $360 000 per year. What is the minimum price that would justify keeping this plant available if it has a 1% utilization rate? Compare this price with the average production cost of the plant.

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