Discusses the events that led to current initiatives to restructure the electric power industry, and the institutional and structural changes that will be required to support the competitive pricing of electricity. Describes the analysis assumptions and methodology. Compares electricity prices under regulation and prices under competition. Discusses the sensitivities of the results to key parameters in the analysis cases. Analyzes the cash flow implications of the new competitive prices for utilities. Extensive charts, tables and graphs.

Electricity spot pricing has been advocated in the past few years as a potential method for assigning incremental electricity costs to the time of delivery, and sending appropriate price signals to customers. Marginal outage costs constitute an important component of electricity spot prices. These costs are defined as the change in the expected customer outage costs that are incurred due to an incremental load change. The published literature indicates that the methods currently available for calculating the marginal outage costs utilize approximate economic models which do not take into consideration the stochastic nature of the power system and its effects on these costs. This thesis presents a method based on quantitative power system reliability concepts for calculating the marginal outage costs in electric power systems. This method is based on the premise that the marginal outage costs are expected quantities that depend upon two major factors: the customer economic costs that accompany various outage levels and the effects of load changes on the probabilities that these costs will actually be incurred. The proposed method calculates the marginal outage cost as the product of the incremental expected unserved energy and the average cost of unserved energy. A method for calculating the incremental expected unserved energy in generating and composite generation and transmission systems is developed in this thesis. The average cost of unserved energy is represented by the interrupted energy assessment rate. The proposed method is illustrated in this thesis by application to two reliability test systems in order to show the impact of system size on the robustness of the method and the accuracy of the approximations. In addition to the basic studies, a number of sensitivity analyses are conducted to show the impact of selected modelling assumptions and parameters on the marginal outage cost. The results from the sensitivity analyses are then used to provide recomme.

Proceedings of the Tenth Power Systems Computation Conference

There is a need for fundamental changes in the ways society views electric energy. Electric energy must be treated as a commodity which can be bought, sold, and traded, taking into account its time-and space-varying values and costs. This book presents a complete framework for the establishment of such an energy marketplace. The framework is based on the use of spot prices. In general terms: o An hourly spot price (in dollars per kilowatt hour) reflects the operating and capital costs of generating, transmitting and distributing electric energy. It varies each hour and from place to place. o The spot price based energy marketplace involves a variety of utility-customer transactions (ranging from hourly varying prices to long-term, multiple-year contracts), all of which are based in a consistent manner on hourly spot prices. These transactions may include customers selling to, as well as buying from, the utility. The basic theory and practical implementation issues associated with a spot price based energy marketplace have been developed and discussed through a number of different reports, theses, and papers. Each addresses only a part of the total picture, and often with a somewhat different notation and terminology (which has evolved in parallel with our growing experience). This book was xvii xviii Preface written to serve as a single, integrated sourcebook on the theory and imple mentation of a spot price based energy marketplace.

This book describes the latest microeconomic concepts and operations research (OR) techniques needed to comprehend the design and operation of power markets, as well as the actions of their agents: producers, consumers, operators, and regulators. This is critical when it comes to addressing a constantly evolving power system environment that incorporates an increasing number of no-marginal-cost renewable sources, increasingly competitive storage facilities, increasingly responsive demands, and widespread communication channels that allow distributed decision-making. Such evolving environments call for a re-examination of the microeconomic concepts and OR techniques required by graduate students and practitioners in the electric energy field. This accessible, tutorial-style book features numerous illustrative examples to help readers grasp the economic concepts and OR procedures used by power market professionals. The authors explian these concepts and procedures and present a vision of a renewable-dominated marketplace. Each chapter also includes exercises.