We propose a now active power dispatch technique using pseudo spot price of electricity for a power system area including limited energy supply thermal units. The dispatch technique considers upper and lower generation limits of the generation units, maximum capability of transmission lines and the fuel constraint of the limited energy supply thermal units in a lossy power system. Calculation of active line flows that are used in the determination of optimal active generations are obtained by means of Newton-Raphson AC load flow calculation. We assume that limited energy supply thermal units are fueled under take-or-pay agreement. The proposed dispatch technique was tested on an example power system. The dispatch problem was also solved by means of another dispatch technique that uses gradient method. Results obtained from both techniques are compared. (C) 2002 Elsevier Science Ltd. All rights reserved.