Diesel Powered Electrical Generator is mostly used as Captive Power Plant by homes and businesses in Nigeria due to epileptic public power supply. There is need to develop a model for determining the Unit Cost of Electricity (Naira/KWh) generated and also evaluate the effect of Exchange Rate, Crude Oil price and Diesel price on the Unit Cost. This study considers Unit Cost of Electricity as a function of Annual Cost and Effective Energy Output. The Annual Cost comprises the Fuelling Cost, Routine Service Cost, Parts Repairs Cost and Miscellaneous Cost. The data for the work was sourced from banking sector being Cost Sensitive and having higher data integrity compared with public sector. The analysis breaks the total cost into Fuelling Cost at 86%, 12% for Servicing, Repairs 0.8% and Miscellaneous 1.2%. The calculated average Unit Cost of Electricity is N33.20/KWh. There is relative significant contribution of each variable on the Unit cost with exchange rate having most significant effect. It also shows that 63.7% of the variance in Unit Cost of Electricity can be attributed to composite contribution of Exchange Rate, Diesel Prices and Crude Oil Prices.

Full text: IJEIR_1166_Final.pdf