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The Peoples Gas Light and Coke Company Plans Gas Supply

Author

Listed:
  • Thomas W. Knowles

    (Illinois Institute of Technology, Stuart School of Business, 565 West Adams Street, Chicago, Illinois 60661)

  • John P. Wirick

    (Peoples Gas Light and Coke Company, 130 East Randolph Drive, Chicago, Illinois 60601)

Abstract

A gas utility's profits depend on its portfolio of gas supply and storage contracts and their effective utilization. The Peoples Gas Light and Coke Company serves the Chicago market. Demand for natural gas depends on temperature, which is difficult to forecast. We developed an optimization model that considers multiple weather scenarios in determining a supply portfolio. We originally developed it to support filings of integrated least-cost supply plans with the Illinois Commerce Commission. With deregulation of the natural gas industry, the company has used the model to restructure supply portfolios, saving more than $50 million annually.

Suggested Citation

  • Thomas W. Knowles & John P. Wirick, 1998. "The Peoples Gas Light and Coke Company Plans Gas Supply," Interfaces, INFORMS, vol. 28(5), pages 1-12, October.
    • Handle: RePEc:inm:orinte:v:28:y:1998:i:5:p:1-12
    DOI: 10.1287/inte.28.5.1
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    Citations

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    Cited by:

    1. Nicola Secomandi & Mulan X. Wang, 2012. "A Computational Approach to the Real Option Management of Network Contracts for Natural Gas Pipeline Transport Capacity," Manufacturing & Service Operations Management, INFORMS, vol. 14(3), pages 441-454, July.
    2. Nicola Secomandi, 2010. "Optimal Commodity Trading with a Capacitated Storage Asset," Management Science, INFORMS, vol. 56(3), pages 449-467, March.
    3. Psarras, John, 2016. "Multicriteria decision support to evaluate potential long-term natural gas supply alternatives: The case of GreeceAuthor-Name: Androulaki, Stella," European Journal of Operational Research, Elsevier, vol. 253(3), pages 791-810.

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