contributors judith cardell stephen r. connors - springer978-1-4757-2883-5/1.pdf · contributors...

Contributors

Judith Cardell is in the Office of Economic Policy at the Federal Energy Regulatory Commission. She received a BS in Electrical Engineering and an AB in Government from Cornell University in 1989. She received her masters and Ph.D. in Technology and Policy in Electrical Engineering from the Massachusetts Institute of Technology in 1994 and 1997 respectively.

Stephen R. Connors is director of the Electric Utility Program and the Analysis Group for Regional Electricity Alternatives (AGREA) at the Massachusetts Institute of Technology's Energy Laboratory. Mr. Connors has a Masters in Technology and Policy from MIT, and bachelors degrees in Mechanical Engineering and Anthropology from the University of Massachusetts at Amherst. Mr. Connors' expertise is in strategic planning, renewable energy, energy conservation, environmental regulation, and analytic approaches for educating electric industry stakeholders. Since its inception in 1988, AGPEA. has applied its tradeoff analysis approach in New England, Switzerland, Argentina and Italy, and assisted with its application elsewhere. Prior to his work in the electric sector Mr. Connors was a Peace Corps volunteer in West Africa where he designed and tested wood conserving cookstoves as part of an appropriate technology project.

Raymond Coxe is a consulting engineer with NEES Global Transmission, Inc., the independent transmission project development company of the New England Electric System ("NEES"). He is responsible for developing independent transmission projects in the US and internationally, and for evaluating competitive energy markets. Previously, he marketed wholesale electricity and performed generation planning analyses for the NEES Companies. He received his undergraduate and doctoral engineering degrees from the Massachusetts Institute of Technology before joining the NEES Companies in 1988.

Christopher L. DeMarco received his S.B. in Electrical Engineering from MIT, in 1980, and his Ph. D. in the same subject from the University of California, Berkeley in 1985. Since 1985 he

548 POWER SYSTEMS RESTRUCTURING

has been a member of the faculty of the Department of Electrical and Computer Engineering, University of Wisconsin-Madison.

Robert L. Earle is an associate at The Brattle Group's Washington, D.C. office. He works on issues concerning the restructuring of the electric power industry including transmission pricing and power trading. His published work includes algorithmic advances in power production costing and stochastic programming. He has a Ph.D. in Operations Research from Stanford University.

Lester H. Fink retired in 1997 as Executive Vice President of KEMA Consulting. Earlier, he conducted and managed plant and system control research at the Philadelphia Electric Company ( 1950-7 4), developed and managed the national Systems Engineering for Power program at the U.S. Energy Research and Development Administration, engaged in contract research and consulting in the private sector ( 1 979-97), and served as adjunct professor at the University of Pennsylvania, Drexel University, and University of Maryland (passim). His publications include three U.S. patents (two on power system control) and over fifty papers. He is Life Fellow of IEEE and ISA, a member of CIGRE, and received the Meritorious Service Award of the U.S. Department of Energy.

Francisco D. Galiana was born in Alicante, Spain. He obtained his Ph.D. under Professor Fred C. Schweppe at the Massachusetts Institute of Technology in 1971. Subsequently, he worked at the Brown Boveri Research Center, Switzerland, at the Department of Electrical and Computer Engineering of the University of Michigan and, since 1977, at the Department of Electrical and Computer Engineering of McGill University, Montreal, where he is a f u II professor in the power engineering area. Prof. Galiana is a Fellow of the IEEE and has been active in research and teaching for over thirty years, mainly in issues related to the operation and planning of large power networks.

Thomas A. Gorski received his Bachelor of Science degree in Electrical Engineering from the University of Wisconsin-Madison in 1984, and his Master of Science degree in Electrical Engineering from the same instituition in 1995. He is currently with Ohmeda, Inc. in Madison, WI.

POWER SYSTEMS RESTRUCTURING 549

Frank C. Graves is a principal at The Brattle Group where he advises companies on business strategy, service design and regulatory economics. In addition, he assists senior utility management with evolving markets and industry restructuring. l-Ie helps design and implement long-range investment planning and service design for major gas and electric utilities. Mr. Graves has testified on the economics of unbundling, market entry, and new services before the FERC and state regulatory commissions. l-Ie received a B.A. in mathematics from Indiana University and an M.S. from MIT's Sloan School of Management.

Richard Green is a Senior Research Officer in the Department of Applied Economics, University of Cambridge, and a Fellow of Fitzwilliam College. He has been studying the electricity supply industry in the UK since 1989, shortly before its restructuring. l-Ie spent a year on secondment to the Office of Electricity Regulation in 1994/95.

Philip Q. Hanser is a senior consultant at The Brattle Group where he provides consulting support in the areas of economics and business analysis, and strategic planning with an emphasis on conceptual and quantitative analysis applied to transmission pricing, generation planning, tariff strategies, fuels procurement, environmental issues, forecasting, and marketing. He has published in the areas of public utilities economics, engineering-economics, and statistics. He holds an A.B. in Economics and Mathematics from Florida State University, a Phii.M. in Economics and Mathematical Statistics from Columbia University where he completed the Candidacy Requirements in Economics.

Leonard S. Hyman, a Senior Industry Advisor to Salomon Smith Barney's Global Energy and Power Group, specializes in utility and telecommunications finance and economics. He is the author of America's Electric Utilities: Past, Present and Future (in its sixth edition), co-author of The New Telecommunications Industry, (in its second edition), and editor of The Privatization of Public Utilities.

Marija IIi c is a Senior Research Scientist in the Department of Electrical Engineering and Computer Science at MIT, where she teaches several graduate courses in the area of electric power systems and heads research in the same area. She has twenty years of


experience in teaching and doing research in this area. Prior to coming to MIT in 1997, she was an Assistant Professor at Cornell University, and tenured Associate Professor at the University of Illinois at Urbana-Champaign. Her main interest is in the systems aspects of operations, planning and economics of electric power industry.

Ralph Masiello was educated at Massachusetts Institute of Technology where he received a Ph.D. E.E. and as BSEEIMSEE. He started with ABB Systems Control in 1985 at which time he joined the company as Vice President, Energy Systems and Systems Control Divisions. He has been responsible for ABB SC's business with Electric, Water and GeE Utilities, including Energy Management and SCADA systems, applications software, software products for power systems planning and operations, power plant analysis and operations, and EPRI, DOE and other research. Before joining ABB Systems Control, Dr. Masiello was employed by Control Data Corporation where he served as Director, Projects and Planning and Manager, Systems Planning and Delivery for the Energy Management Systems Division. He currently is a vice president of the Information Systems Division responsible for business development. Within the least year and a half he played a key role in the planning and development of the California ISO.

E. Grant Read leads the Energy Modeling Research Group at Canterbury University, and acts as a Senior Advisor with Putnam Hayes and Bartlett. For the last ten years he has been very closely involved with the reform of the New Zealand electricity sector, both as a researcher and a consultant, and now plays a key advisory role in the development of the Australian national market. Dr. Read holds a B.Sc. with 1st Class Honors in Mathematics, and a Ph.D. in Operations Research, with graduate papers in Economics. He is a past president of the Operations Research Society of New Zealand.

Gerald B. Sheble is a professor of Electrical and Computer Engineering at Iowa State University. Dr. Sheble's research interests include artificial life techniques (expert systems, genetic algorithms, genetic programming, artificial neural networks) as applied to power systems analysis, operation and planning and other industrial domains. His research has focused on price based markets


for operation and planning for the electric power and natural gas industries.

Ziad Younes is a Lebanese engineer and economist. He has graduated from the Ecole Polytechnique in Paris, and has a Master in Technology and Policy from the Massachusetts Institute of Technology. He has a D.E.A in Industrial Organization from the University of Paris IX and is currently a Ph.D. student there. Ziad's interest is mainly focused on how to deal with market imperfections in a deregulated electric power industry.

Index

Access 408-9, 419-20, 427, 431-3, 443-4 Access rights 408-9, 433 Adequacy of generation 243 Ancillary services 406, 408, 411, 422, 438 Anti-competitive 518, 545 Arc furnace 72 Area control error (ACE) 439-40 Automatic generation control (AGC) 22, 24, 26, 36, 71, 72, 99, 412, 424, 428, 432, 434, 437-8, 440-2 Available transfer capability (ATC) 19 Base load 412, 421, 424, 427-30 Bertrand 348, 350 Bertrand-Nash equilibrium (BNE) 352-3 Bilateral 16, 20, 21, 29, 30, 31, 33-37, 39, 40, 42, 78, 99 Blackout 17 California 20, 99 Call option 245, 266, 270, 272-3 Capacity payments 136-7, 141-6, 153, 163-5 Capacity planning 243-4, 253, 276 Central Electricity Generating Board 18 Charges, compatibility 98 Clean Air Act 394, 397

Closed loop price signal 459, 477-8, 482, 484, 486, 488, 490, 494, 499, 500-1

Benefits 478, 482, 499, 500-2 Affects of imperfect information 484, 494, 500 Data requirements 495-7

Collusion 356 Compensation 37 Compensation, usage-based loss 15, 16, 21, 22, 27, 72, 79, 99 Competition 16-19, 21

Ancillary services 459, 477-9, 482-3 Energy markets 454, 459, 477-80, 482-3, 6, 501

Congestion 17, 19, 20, 78, 444, 449 Constrained zone 340 Constraints

Generation 40, 41 Operating 21, 39, 40, 99 Static 22 Stability 21 Thermal 21 Transmission 20, 21, 27, 98 Voltage 21

Consumer 17, 28, 30, 31, 34, 37, 72, 78, 80


Contract 18-21, 30, 33-37, 70, 72, 79, 99

For differences (CFDs) 34, 134, 144, 151' 162-3, 135, 147, 164 Specification 30, 72, 73 Firm 19, 33, 37 Long-term 29, 31, 37, 39, 72 Tradable 29

Control Area 16, 17, 22, 25, 26, 72, 414, 427, 439 Automatic generation 16, 22 Centers 16, 25 Decentralized 422, 424, 427, 444 Emergency security 16 Excitation 22, 26 Fringe 413-4, 421, 424, 430-1, 437, 439, 442 Generation 405, 411, 423, 429, 434, 437, 440 Horizon 424, 429, 431 Manual 26 Network 423, 428, 432-4, 443 Preventative 16 Primary 19, 22, 26 Reactive power 16 Secondary 22, 25, 26 Schemes, decentralized 24 Structure 405-6, 409, 423-4, 427-31' 435, 438, 440 Tertiary 98

Coordinating councils 16, 17 Cost allocation 27 Cost minimization 17, 18, 20 Costs

Fixed 26, 27 O&M 26, 27, 28 Start-up 29 Total 22, 26, 27, 29

Cournot 348-9 Criteria 283-6, 288-9, 294, 299-301' 303-5, 311' 315, 317, 319-20, 328-31 Customers, residential 17, 19, 27, 37, 72 Decentralized control 457, 475, 479 Decision makers, financial 33 Decomposition, spatial 24 Decomposition, temporal 23, Default regulation 412, 414, 422, 428-9, 438 Deintegration 407 Demand 24, 26, 30, 31, 99

Actual 26, 29 Anticipated 22, 25, 28 Elastic 38, 99 Fluctuations 21, 24, 26, 27, 29, 72 Inelastic 38, 39, 40 Predicted 21, 24, 28-31' 33, 37, 38, 71' 79, 98 Residual 337, 339 Scheduled 22

Demand side bidding 160 Demand-side management 388 Deregulation 405-9, 427 Deviation 15, 22, 24, 26, 37, 38, 42, 72 Deviations, expected band 72


Director General of Electricity Supply (the regulator) 136, 147-53, 155-8, 160, 162, 1 6 4-5 Distributed generation

Generator modeling 463, 503 Governor tuning 498 Power system evolution 455, 457, 500 Pystem modeling 463

Distribution companies (discos) 18, 19 Dynamic control 517-8, 545 Economic dispatch 22, 25, 26, 29, 30, 35, 40, 412, 414, 424-5, 430, 433, 435, 440

Conventional 39 Decentralized 31, 33, 36, 79 Generalized 16, 22, 25, 26, 29-31, 33, 35-39, 42, 79

Effect, intertemporal 15, 16, 40, Efficiency 18, 27, 33, 80 Eigenvector placement 519, 525, 538 End user 22, 28 Energy contracts 72 Energy management system 16, 25 Entities

Generator-serving 21 Load-serving 20, 21 Trading 20, 21, 27

Environmental regulation 385, 388, 397-399, 401 Equipment status 22 Equivalence, theoretical 33

Estimation, state 16 Evaluation 284-5, 288-90, 294, 298, 300, 302, 304-5, 307, 310-1' 318-9, 330 Excitation system 26 Fairness 20, 98 Financing 322, 331 Flexible AC transmission system (FACTS) 21, Flexible plants 22 Flow constraints, tie-line 27, 98 Forward market 244-6, 258, 260, 262, 276 Frequency 410, 412, 414-5, 419, 422, 424-5, 428-9, 432, 437-442, 445

Quality 22 Regulation 419, 437, 440

Frequency stability 459-60, 463-4, 467-70, 475, 483, 498-9

Causes of instability 460, 468, 470, 472, 475, 515 Sensitivity matrix 473, 475

Gaming 72, 78, 355, 409, 425 Generation dispatch 16 Generation, flexible 22 Generation, reactive power, var 19, 22 Genoa 18 Geographical position 342 Governor 22, 26, 99, 517-9, 521, 528-9, 540, 545-6 Green pricing 387, 393-4 Grid expansion strategies 366 Hedging 34


Hierarchical organization 25 Hydro storage facilities 25 Imbalances 16 Incentives 406, 409-11, 421, 426, 445 Independent power producers 1 7 Independent system operator (ISO) 19, 407, 412 Industry, new 29, 31, 35, 36, 73, 80, 98 Inelasticity 361 Inertia 26 Information flow 21 Integrated Resource Planning 388-90, 393 Inventories 16, 35 Investment 284-7, 289-90, 292, 294, 299, 300, 302, 304-7, 309-12, 316, 319-20, 328, 331-2 Load 19-21, 29-31, 38, 72

Dynamics 24 Following 414-5, 429-30, 442 Forecasting 16 Interruptible 19 Self-stabilizing effect 26, 72 Serving 409, 415, 418, 429, 431' 433

Loop flows 358 Loop, closed 24-26, 42, 71 Loop, open 24-26 Loss compensation 15, 16, 22, 412, 414-5, 419, 422, 438-9

Usage-based 15 Loss of load probability 137, 1 41-2

Loss, transmission 15, 16, 19, 21' 27, 72, 79, 99 Maintenance 28 Market 15, 20, 21, 27, 30, 34, 35, 41' 99

Clearing 31, 32, 41 Equilibrium 15, 41 Participants 20, 27, 29, 31' 33, 35-38, 78, 79, 80, 99 Power 18, 27, 30, 134, 148, 150, 152-5, 163, 336, 342, 368 Power, locational 344, 354-5 Prediction 29 Speculation 33 Structure, bilateral 20 Structure, pool 17, 20, 38 Uncertainties 33, Electricity 15, 30, 34-37, 40, 41, 78, 79, 99 Electricity, primary 15, 28, 29, 30, 72, 79 Long-term 365 Optimal 78 Perfect 15 Primary, optimal 16, 72, 79 Real-time 15, 35 Spot 29-31, 33-38, 42, 73, 74, 78 Spot, clearing process 31' 32

Marketers 21, 34 Monopolistic structure 17 Nash equilibrium 356

Inter-temporal 353


National Grid Company (NGC) 136, 138, 146-8, 150, 155-6, 159, 161, 164 National Power 136, 150, 152-3, 155, 163 Network expansion, threat 367 Network loading 415, 433 Network reinforcement 423 New England 20, 99 New York 20, 99 Nodal pricing 344 Non-dispatchable technologies 463, 478, 492, 500, 505 Objective 15-17, 22, 26-28, 30, 33, 72, 78, 79, 99 Observer 517, 531 Oligopolistic competition 347 One-part pricing 244, 246, 264, 273, 276, 278 Operation 15, 16, 20-24, 27, 40

Efficiency 18 Normal 19, 24 Real-time 23, 28 Tasks 15, 21, 22, 27

Operator parochialism 410-1, 420 Optimization 295-8, 414, 433-5

Nonconvex 32 Ownership 28

Multiplying 365 Performance 16, 28, 33, 36, 41, 42, 78, 79, 80 Planning 283-6, 288-95, 297-301, 304, 311, 312, 315, 317-9, 328-32

Reserves 243-5, 248-50, 257, 276, 278

Pool 16, 17, 20, 21, 38

Poolco 16, 28, 37, 38 Portfolio standards 385, 393-4, 398 Power

Contracted 72 Exchange 16, 19, 20, 25, 28, 30, 36, 99 Industry, competitive 27, 71, 78 Plants, low cost 17 Predicted 35 Purchase 29, 31 Reliable delivery of 33 Sold 30, 33, 34

PowerGen 136, 150, 152, 154-5, 163 Price 15-20, 27, 29-35, 37-41, 72-3, 78, 80, 98-9

Average 27 Caps 365 Electricity 15-6, 22, 26-7, 30, 33, 35, 37-40, 72, 78 Volatility 15

Pricing, ex ante 37-39, 78 Pricing, ex-post 37-39, 78 Process, market-clearing, self-adjusting 31, 32 Profit 17, 33, 34, 78 Profit, actual 34 Profits, short-term 72 Project, dedicated 285, 312, 318-21, 324-5, 327, 329, 332 Project, network 285, 312, 318-21, 324-5, 327, 329, 332 Provision, reliability 16 Random deviations 22 Rates of response 24


Reaction functions 358 Reactive energy 412, 416-7 Real time 17, 26, 28, 30, 31, 35, 37, 71-73, 78, 79 Regulating units 22, 26 Regulation 19, 22, 26

Frequency 25-27, 36, 73 Frequency, closed-loop 24, 26 Market for 73 Tertiary level 22, 25, 27

Relevant market 338, 345 Reliability 244, 24 7-50, 257, 263, 273, 276, 277, 283-89, 292-4, 298-301' 303-6, 311, 319, 321-2, 328-32 Reliability standards 17 Renewable energy 385, 393-4 Reserves 412, 418, 422, 426, 429, 436-7

Margin 17, 29, 419, 436, 443 Requirement 249-50, 271 Short-term spinning 19 Stand-by spinning 19

Restructuring 405-9, 422, 427, 432, 435, 438, 444 Retail competiton 392-3, 398 Scheduling, generation-based 25, 38 Scheduling, tie-line flow 26 Security 410, 412, 418-20, 422-4, 426, 428-30, 431-7, 440, 443-5

Coordinators 17 Criterion 22

Self-adjusting 31, 42, 78, 79

Process 32 Effect 26, 72

Sellers 17, 19, 20 Separation 407-8 Service unbundling 19 Shareholders 18 Siting 299, 302, 327-9 Spinning reserves 418, 426 Spot price 245, 247, 253, 257-263, 266, 269, 271' 276, 353 State feedback 519, 521-35, 537-9, 543, 546 Storage 25, 99 Strategic behavior 355 Structure 16, 17, 20, 21, 24, 27, 33, 36, 37, 40, 41' 42, 78, 79, 405-7, 409-12, 421-31' 434-5, 437-8, 440-3

Information/control, hierarchical 22

Supply function 350 Equilibrium 349

Supply/demand mismatch 16, 26, 35, 71' 72, 78 System 15, 16, 25

Control 406, 410, 412, 420, 422, 426, 434-435, 440, 444 Development 283, 286, 289-90, 300, 318, 320-2, 329-30 Expansion 283, 286, 289-90, 300, 318, 320-2, 329-30 Marginal price 136-9 Planning 283, 286,

300, 318


Security 410, 419-20, 423-4, 426, 430, 435, 437, 443 Structure 15, 16, 21 Disturbances 73

Systems Benefits Charges (SBCs) 393-5 Tacit collusion 351 Tariffs 17, 19

Single 18 Two-part 26, 27, 37

Tertiary level 22, 25, 27, 79 Tie lines 16, 26, 27, 98 Topology, network 343 Trading entities 21 Trading outside the pool 151-62 Transaction networks 16, 21, 22, 29 Transactions

Bilateral, physical 29, 36, 37, 42, 78

Nontradable, physical 36 Self-scheduled 30 Tradable 30, 35, 79, 99

Transco 18, 19 Transmission 132, 136-8, 146-8, 154-5, 157-8

Capacity 19 Congestion 78 Congestion contracts (TCC) 19, 370 Constraints 356 Loss compensation 15, 16' Losses 19, 21, 27, 72, 79, 99 Network 18, 19

Two-part pricing 244-6, 273-4, 278 Unbundled 16-19 Unbundling 407-8, 411

Corporate 18, 19 Unit commitment 16, 22, 25, 26, 32, 33, 34

Simplest 33 Stochastic 34

Uplift 136-8, 142, 144, 146-8, 156, 161, 164 Utilities 16, 17

Distributed 398-400 Vertically integrated 17

Volatility 15, 72, 73, 246, 253, 257-8, 262, 271 Voltage 19, 21, 22, 26

Control 434-5 Profile 416-7, 432, 435-7 Support 412, 416-7, 429, 433, 476-7, 482, 499, 502, 514-5 Local 26

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