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A phased approach to calculating the expected operating cost of a power system, under the incremental loading procedure, is presented. The units in the system are divided into subsets according to their marginal cost characteristics. The contribution of each subset to the operating costs of the system is then derived in a recursive manner, taking maintenance and forced outages into account. The procedure is also extended to yield the expected amount of energy delivered by each unit in the system as well as the expected fuel cost for each unit. Given the unit cost of fuel, the expected amount of fuel consumed by each unit is easily derived.