Competition and system stability - The reward and the penalty

The business protocols and rules of the competitive electricity market are resulting in fragmentation of the historical vertically integrated structur es. Electric services are offered at either cast or market-based prices dep ending an their type and the level of competition in a particular product. System stabilizing measures ar-e essential for maintaining system security, yet their value is either underestimated or not understood. This paper des cribes practical methods to quantify rite value of some of the stabilizing measures and ways to ensure maintaining the dynamic security of the power s ystems through business procedures and monetary sanctions.