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Transmission Planning, Investment, and Cost Allocation in US ISO Markets

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Transmission Network Investment in Liberalized Power Markets

Part of the book series: Lecture Notes in Energy ((LNEN,volume 79))

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Abstract

Independent system operators (ISOs) plan the electric power transmission system over large geographic areas. A wide range of modeling tools is available, including production cost planning models, large-scale optimization models, and reliability models. Each model addresses different aspects of the optimal planning process. This paper reviews the current approach for transmission planning and investment in a competitive environment and presents a modeling approach for regional planning and investment in a competitive generation environment. The framework proposed can be used in an auction to award investment contracts or as a part of a more detailed policy analysis. The result yields the set of transmission projects that have the highest expected benefits, while also representing generic generation expansions.

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Notes

  1. 1.

    See also Léautier’s chapter in this book (chapter “Regulated Expansion of the Power Transmission Grid”).

  2. 2.

    See also Vogelsang’s paper in this book (chapter “A Simple Merchant-Regulatory Incentive Mechanism Applied to Electricity Transmission Pricing and Investment: The Case of H-R-G-V”).

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Author information

Authors and Affiliations

  1. ARPA-E, Dept. of Energy, Washington, D.C., USA

    R. P. O’Neill

Authors
  1. R. P. O’Neill
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Corresponding author

Correspondence to R. P. O’Neill .

Editor information

Editors and Affiliations

  1. KTH Royal Institute of Technology, Stockholm, Sweden

    Mohammad Reza Hesamzadeh

  2. Centro de Investigación y Docencia Económicas (CIDE), Mexico City, Mexico

    Juan Rosellón

  3. Boston University, Boston, MA, USA

    Ingo Vogelsang

Glossary

B/C

Expected benefit/expected cost ratio

DFAX

Distribution factor

EPAct

Energy Policy Act

ERIS

Energy resource interconnection service

FGR

Flowgate right that entitles the holder to the marginal value of a flowgate (FMV)

Flowgate

A transmission line or collection of tightly interconnected transmission assets

FMV

Flowgate marginal value is the value of another unit of capacity on the flowgate

FTR

Financial transmission right obligation to pay/receive the difference in nodal energy prices. It is a portfolio of purchases and sale of flowgate rights. The value of the portfolio is determined by the flowgate marginal values

FUA

Powerplant and Industrial Fuel Use Act

IPP

An independent power producer not owned by the interconnected utility

ISO

Independent system operator (an RTO is also an ISO.)

LGIA

Large generator interconnection agreement

NITS

Network Integration Transmission Service allows a network customer to integrate and economically dispatch and regulate its current and planned network resources to serve its network load in a manner comparable to the way a transmission provider uses its transmission system to serve its native load customers. Order No. 676-H, 2014

NRIS

Network resource interconnection service

OATT

Open access transmission tariff

Option FTR

Financial transmission right the right to receive flowgate rights. It is a portfolio of purchases and subsequent sale of flowgate rights

PMU

Phasor measurement unit

Pseudo tie

is a transmission service that allows the generator to be dispatched by the receiving BA. The energy transfer is updated in real time and included in the actual net interchange term like tie line in the affected BAs’ control ACE equations or alternate (NERC)

PURPA

Public Utility Regulatory Policy Act

RAS

Remedial action scheme that generally relies on control mechanisms to satisfy reliability

Resource adequacy

Occurs when all generators are available there is enough generation to serve forecasted non-price-responsive load and have sufficient reserves taking into account the transmission constraints and outages

RTO

Regional transmission operator

Specific delivery

is a contract between a generator and load that requires energy injected into the system to be delivered to the load. This is physically impossible except in simple systems. A milder form of contract requires the injections correspond to the withdrawals

Sunk cost

is a cost that has already been incurred and has no value in an alternative use

TLR

Transmission line loading relief

TO

Transmission owner

VOLL

Value of lost load

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O’Neill, R.P. (2020). Transmission Planning, Investment, and Cost Allocation in US ISO Markets. In: Hesamzadeh, M.R., Rosellón, J., Vogelsang, I. (eds) Transmission Network Investment in Liberalized Power Markets. Lecture Notes in Energy, vol 79. Springer, Cham. https://doi.org/10.1007/978-3-030-47929-9_6

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  • DOI: https://doi.org/10.1007/978-3-030-47929-9_6

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  • Print ISBN: 978-3-030-47928-2

  • Online ISBN: 978-3-030-47929-9

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