In thinking about transmission pricing for a competitive electric industry, we should remember that the fundamental objective of competition is to increase economic efficiency. Improved economic...
A West Coast View: The Case for Flow-Based Access Fees
competitive market, a distance-based fee, paid by power producers for access to the regional grid, should align the producer's least-cost option with society's goal to minimize the total cost of delivered power.
Cliff Rochlin is a market advisor to the Energy Transportation Services Business Unit of Southern California Gas Co. Roger Clayton is a Consulting Engineer with General Electric Power Systems Energy Consulting Department. This article is a condensed ver
sion of a paper written by Clayton and Rochlin. The full the paper is available on request.
A Technical Study: Power-Flow Analysis
Transmission Line Use in WEPEX
Southern California Gas commissioned General Electric's Power Systems Energy Consulting department to analyze power flow and develop the technical basis for a flow- and distance-based transmission-pricing algorithm to use in the Western Power Exchange. The study analyzed transmission usage in WEPEX and identified a clear local and regional distinction in the use of California transmission lines. In California, regional lines tend to be above 230 kilovolts, while local lines are 230 kV and below.
The power-flow analysis was constructed to model a wholesale pool environment, where power injection at any generating node is balanced by a load change distributed equally to all load centers. %n10%n The resulting change in flow in each line can be denoted by distribution factors that allow flow on each line to be calculated for any dispatch condition. %n11%n Figure 1 shows that 34 MW of the Mohave power injection flows on the Mohave Lugo 500-kV transmission line. The proportion of Mohave power flowing on this line is a constant, assuming system linearity, and is defined by a DF of 34 percent (or 0.34 per unit). Every line in the system will have a unique DF associated with every generator in the system. The characteristics of these DF and the resulting line usage (MW-miles) are used to classify lines according to their local and regional function.
Study Assumptions. It was assumed that the electric utility structure in California would be based upon the WEPEX power exchange and independent system operator proposal by three major California IOUs. The PX will develop a day-ahead, wholesale auction, on an hourly basis for the following 24 hours. The next-day generator merit order will be based on bid price and transmission constraints. As the load changes, individual generators will be added in merit order.
Therefore, a key observation is that a unique generator/load pair can be identified for each generator. The load will be that portion of the total system load that requires the commitment and dispatch of the next generator in the merit order to supply the PX/ISO wholesale supplied load. This observation allows a unique distribution-factor matrix to be developed for each transmission line (1,056) and generator (245) in the WEPEX system.
Distribution factors for each generator will have values between 0.0 and 1.0 per unit for each line in the system. The actual line flow due to each generator can be calculated by multiplying the DF by the output of the generator. Distance is introduced by multiplying the actual flow in each line