Transmission Expansion in an Open Access Environment: Reliability and Economics

University Of Washington, Seattle WA

Investigators

Abstract

Transmission expansion is a nationally important area for reliable supply of electric energy and yet it is seriously under-invested in the U.S. According to North American Electric Reliability Council (NERC), '"very few bulk transmission line additions are planned; new regional planning entities, adequate pricing incentives, and improved, streamlined approval processes also must be developed to deal with the need for new transmission lines for an open market." In a competitive environment, the Independent System Operator (ISO) (or Regional Transmission Organization (RTO)) is charged with the responsibility to maintain the system reliability of an interconnected power grid. The ISO also operates the power grid and implements the transactions of electric energy. However, the ISO does not invest in the transmission expansion; the investors such as transmission owners do. We propose a stochastic model for the revenues of the transmission owners. We will develop analytical methods that determine the point of decision where a transmission own would be willing to invest in a transmission expansion project based on the costs and revenues. The proposed method requires power system optimization incorporating system security and congestion constraints. This proposed research is expected to make an impact on how the market rules concerning transmission expansion should be designed. The resulting rules would provide the necessary economic signals in the market in order to ensure an adequate level of transmission capacity in the U.S.