What is meant by 'Marginal' price?
A marginal price is the price paid for the last increment of energy purchased. This should, therefore, exclude all fixed charges (e.g., the monthly customer or meter charge) and focus only on the costs that vary based on the amount of energy used. Some rate structures are more complex and require some analysis. For example, in a block electric rate structure where users pay a certain amount depending on how much electricity used during the month, the value of electricity would be the price corresponding to the amount the building generally consumes in a month (rather than the average cost over all kWh's used). The marginal rate is the value of a unit of energy saved (i.e., the value of a kWh saved by an efficiency measure).
Providing detailed marginal prices for electricity (including any time-of-day or seasonal variations, and the impact of demand charges and ratchets) is important as it can have a huge impact on the types and cost effectiveness of recommended efficiency measures, as compared with applying basic melded average rates.