An integrated approach to electric power system planning and cost of service allocation

Abstract

Many methods have been proposed to allocate capacity related costs to the various customer classes in an electric power system. These methods are mainly deterministic. Deterministic techniques do not consider the stochastic nature of system components which actually affect the cost behaviour of the system. An important consideration in the process of cost allocation is to ensure that the method used follows the cost behaviour of the system studied. The cost behaviour is basically dependent on the methods and criteria used in system planning and operation. The criteria and planning methods used drives the development of the system which further drives the cost of future investment in the system. It is therefore highly desirable to use similar methods and criteria and to include the same variables which are considered in the system adequacy evaluation. Most large electric power utilities now use probabilistic techniques in their generation system planning. The most commonly used planning techniques are the Loss of Load Expectation (LOLE) and the Loss of Energy Expectation (LOEE) methods. Probabilistic techniques should also be used in the cost of service allocation process as these techniques are capable of incorporating the important factors which actually affect the system cost behaviour.