A dam broke last year, releasing a wave that even now is spreading through the U.S. power industry. Deals that had been languishing on the auction block for months suddenly surged forward in 2004...
Exploiting the Random Nature of Transmission Capacity
more but with a greater assurance than with present practices that service would not be curtailed.
Since the transmission system could accommodate more users, the fixed costs would be spread over more MWh, making transmission cheaper, on the average, for everyone.
The transmission services provider would reduce his risk of being sued for interrupting contracts. The transmission services provider would also reduce the risk of regulatory censure for leaving transmission capacity idle. People are becoming aware that there is unused transmission capacity out there - a lot of it - and some more-suspicious citizens may contend that utilities are withholding it from the market for reasons of their own. The absence of actual nefarious intent will not keep the lawyers at bay.
Finally, measuring and selling transmission capacity probabilistically can keep us from wasting money building transmission facilities that we don't truly need. For example, consider an industrial installation with a need for a lot of low-grade process heat - a textbook opportunity for a cogenerator of say, 150 MW. Suppose that he is on the wrong side of a transmission interface that is committed to prior users up to its (traditional) limit of (to pull a number out of the air) 3,500 MW.
Getting 150 MW more transmission capacity might require half of the capacity of a new 230-kV line, 100 miles long, costing $250,000 per mile. If the IPP had to pay for this, it could make the cogeneration uneconomical.
The IPP might be quite comfortable selling nonfirm energy across an interface that was available 60 percent of the time, though - particularly if he got a price break for taking interruptible transmission. And a power marketer at the other side might be willing to pay him almost as high a price as he would pay for firm power, perhaps covering the uncertainty with other contracts, or perhaps simply diversifying it away. Recognizing the random character of transmission capacity, and designing contracts consistent with it, could avoid a $25-million investment in a new line.
Transmission is a force-at-a-distance function of an integrated energy-conversion machine. It shares with transportation the notion of distance, but very little else. An electric transmission system consists of three elements:
1. current-carrying hardware;
2. control and protection devices; and
3. planning and operating practices and procedures.
It is remarkable that, in spite of the thousands of miles of transmission circuits in service, and our century of experience with transmission, we do not have a way of measuring transmission capacity directly.
Probably the best definition of transmission capacity, and one that is consistent with Available Transmission Capacity under the Federal Energy Regulatory Commission, was developed by the North American Electric Reliability Council:
FCITC [first contingency incremental transfer capability] is the amount of electric power, incremental above normal base power transfers, that can be transferred over the interconnected transmission systems in a reliable manner based on all of the following conditions:
(1) [W]ith normal (pre-contingency) operating procedures¼ all facility loadings are within normal ratings and all voltages are within normal limits;
(2) The electric systems are