MARGINAL COST-BASED PRICING OF WHEELING TRANSACTIONS AND INDEPENDENT POWER PRODUCERS CONSIDERING SECURITY CONSTRAINTS

Various proposed pricing policies for wheeling transactions and indepe ndent power producers under open transmission access do not compensate , in a direct manner, parties who participate in maintaining network s ecurity and provide the system reactive power requirements. Within thi s paper, a pricing structure that provides such compensation, based on physically meaningful price components, is developed. Prices determin ed by the proposed method reflect the cost of incurred losses and thos e of satisfying network security constraints. The effects of security constraint specifications on price calculations is investigated. Resul ts are presented for the IEEE 6- and 30-bus test systems. (C) 1998 Els evier Science S.A. All rights reserved.