AbstractMarginal pricing of electricity calls for the determination of marginal energy costs over time. The purpose of this paper is to provide a computationally efficient procedure for computing the time-dependent probability, under merit order operation and forced outages of units, that any given plant will be the last plant used in a given multi-plant power system. This then allows a straightforward calculation of expected marginal energy cost for the given-power system over time. Other performance measures are derived as a by-product at relatively little extra computational effort. The method is applied to a realistic system and numerical results are presented and discussed.