A regional linear logit fuel demand model for electric utilities

We investigate a short-term forecasting and simulation model of utility fuel demand based on the linear logit model. The forecasting properties of the model are surprisingly good for such a simple econometric model of factor demand. The model ignores the distinctive characteristics of electric utilities (load curves, wheeling, etc.) yet produces remarkably good forecasts at both the national and regional levels. Because the model is based on neoclassical theory it can be used for simulations, making it more useful, and less ad hoc, than a pure forecasting model.