FOLK THEOREMS ON TRANSMISSION ACCESS - PROOFS AND COUNTEREXAMPLES

Nodal prices, congestion revenues, transmission capacity rights, and c ompensation for wire ownership are key concepts used to formulate clai ms about proposals to organize competitive and open transmission acces s. Underlying those claims are implicit assertions (folk theorems) con cerning the regulation of transmission access, the determination of po wer flows, properties of economic dispatch, and the operations of comp etitive nodal markets for power. The paper has two objectives. We firs t formulate these folk theorems as explicit mathematical assertions. W e then prove that some of these assertions are true, and we present co unterexamples to other assertions. The counterexamples are interesting because they negate plausible propositions, including: (1) uncongeste d lines do not receive congestion rents (defined through node price di fferences); (2) nodal prices clear markets for power only if the alloc ation is efficient; (3) in an efficient allocation power can only flow from nodes with lower prices to nodes with higher prices; (4) strengt hening transmission lines or building additional lines increases trans mission capacity; (5) transmission capacity rights are compatible with any economically efficient dispatch.