This study examines the economic feasibility of substituting electricity generated on dairy farms by methane gas system; for electricity purchased from local utility companies. Electric power is an important input in the operation of a dairy farm. The central question was which source of this input was the cheaper? Herd sizes included in the study were 50, 100, 200 and 300 CONS. The cost of methane generated electricity is compared with the cost of purchased electricity. Results are presented by size of dairy herd.