(c) One recent cost analysis report indicates that electricity from hydroelectric power can be produced for about $0.05 per kWh , while electricity from conventional coal-fired power plants can be produced for an average of about $0.11 per kWh . Calculate the percent change in the cost of electricity for a typical house resulting from a switch between conventional coal-fired power plants to hydroelectric power. Show your work.

54.5%

Explanation:

Hydroelectric power is said to cost $0.05 per kWh to produce. A typical house uses 10,900 kWh in a year so in a year it would cost,

= 0.05 * 10,900

= $545

Coal-fired Electricity can be produced at a cost of $0.11 per kWh so a typical house would cost,

= $0.11 * 10,900

= $1,199

Percentage change in the cost using Coal-fired as a base is,

= (1,199 - 545)/1,199

= 0.5455

= 54.5%

54.5% is the percent change in the cost of electricity for a typical house resulting from a switch between conventional coal-fired power plants to hydroelectric power.

The percent change in the cost of electricity from coal-fired to hydroelectric power = 54.5% reduction.

Explanation:

a) The cost of coal-fired power       =   $0.11 per KWh

b) The cost of hydroelectric power = $0.05 per KWh

c) The reduction or savings = $0.06 ($0.11 - $0.05) per KWh

d) The % change is therefore = $0.06/$0.11 x 100 = 54.5%

e) The implication is that it will cost a typical house 54.5% less when it switches from coal-fired power plants to hydroelectric power.  The house will be paying $0.06 less per KWh.

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