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Implementing Transmission Access: Getting the Genie Out of the Bottle(neck)

Fortnightly Magazine - May 1 1995

timing of flows to that location may so alter the actual costs of making and getting power there as to create disconnects between the promised (or expected) and delivered prices. However, traders can surmount this obstacle by judiciously choosing the definition of how price indices are calculated and selecting a sufficient number and diversity of alternative delivery points, while carefully checking that none are oversold on paper.

Wheeling Rates

Wheeling rate possibilities run the gamut. Just pick your poison (see sidebar below).

Proper technical analyses are required to evaluate all alternatives before selecting the best choice for the situation at hand (em or even meaningfully narrowing down potential selections. Many aspects must be considered, such as:

s Physical cost components

s System-condition effects on costs

s Modeling power system costs and configurations

s Practicality of pricing methods

s Billing and reconciliation activities.

Thus, it is fair to say that substantial technical work remains before selecting and implementing preferred new wheeling charge methodologies in various jurisdictions. Choosing the best approach means a lot. For example, in an area with existing and increasing transmission bottlenecks, it should be paramount to use a long-run incremental cost-based wheeling charge approach that appropriately encourages timely and optimal construction of new facilities.

Richard P. Felak, of Schenectady, NY, has worked in the power industry for 30 years. His areas of expertise include wheeling analysis, power marketing, least-cost planning, project development, and regulatory strategy. Mr. Felak currently is adjunct consultant to Charles River Associates. He is a Registered Professional Engineer, a panelist of the American Arbitration Association, a senior member of the Institute of Electrical and Electronics Engineers, and a member of IEEE's Task Force on Transmission Access and Nonutility Generation. Mr. Felak holds an M.S.E.E. in Power Systems from Rensselaer Polytechnic Institute.

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