Utility executives face volatile energy markets, skyrocketing fuel prices, and changing federal energy policies. How are utilities benefiting from the turnaround in energy trading?
Exploiting the Random Nature of Transmission Capacity
per year) to transaction B to increase its service reliability from 15.75 percent to 3.5 percent. If a transmission reinforcement that would accomplish this had a carrying charge of less than $3 million per year, then B likely would be willing to pay for it. Similarly, C would likely be willing to contribute up to $4/kW per year ($600,000 per year) if its service reliability could be increased.
These ideas should find their way into the market place. To make this possible, transmission service providers should: 1) Post probabilistic instead of deterministic ATC for key lines and interfaces; and 2) allow customers to pay for different levels of reliability.
Yes, these actions will make a bit more work for transmission companies. But this ability should lead to increased use of the transmission system, reduced risk, lower rates and better planning decisions.
Hyde M. Merrill is the proprietor of Merrill Energy LLC, an electric power consulting firm in Schenectady, N.Y.
1. R. M. Maliszewski and M. Chau, Application of Probabilistic Transfer Capability Analysis in Transmission System Performance Studies. CIGRé paper 38-01, Aug. 28-Sept. 3, 1988.
2. Transmission Transfer Capability, North American Electric Reliability Council, Princeton, N.J., May 1995.
3. Engineering and Reliability Effects of Increased Wheeling and Transmission Access, Edison Electric Institute, Washington, D.C., November 1988.
4. H. M. Merrill, Probabilistic Available Transfer Capability, presented at panel session on risk analysis of available transfer capability, IEEE PES Winter Meeting, Tampa, Fla., Feb. 4, 1998.
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