Abstract
The objective is to examine the theoretical bases for benefit optimization in centralized and decentralized electric power systems. In a centralized (single control) power system, cost, revenue, and profit are used as system performance criteria for benefit optimization, and the conditions are compared. The results show that conventional cost minimization is not necessarily equivalent to benefit optimization based on other criteria. In a decentralized (multi-utility) power system, benefit optimization and its allocation are investigated at the unconstrained economic optimum, economic optimum with constraints, and conditions under which the solution is an economic suboptimum. The data from the EPRI Regional Systems are used to show practical examples of the benefit allocation with wheeling transactions. Although some rules are better for society than others, there still is not one right answer to determine the rules for benefit optimization. >
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