Wheeling Charge Under a Deregulated Environment

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Industry Applications, IEEE Transactions

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Today's electric power industry is undergoing many fundamental changes due to the process of deregulation. Traditionally, electric power systems in many countries were structured in a single vertically integrated company for providing electric power to their customers based on cost of service. However, a number of countries have implemented or are implementing a free market deregulated industry in recent years. It is strongly believed that deregulation will have profound and important implications on technology within the electric power industry and the operation of industrial systems. Therefore, industrial sectors need to reevaluate potential impacts and strategies of operation under a deregulated environment. One of the most exciting opportunities for the customer is the implementation of wholesale and retail wheeling. With this change, customers will have the option to purchase services and energy from different sources. However, before exercising this right, one has to understand the possible costs and risks associated with this right. From the economic point of view, lower energy cost does not necessarily mean lower utility cost. The cost of wheeling charges and other factors have to be figured into the calculation. Since it is impossible to color the electron, there is no standard formula to calculate wheeling charges within the utility industry. This paper discusses several commonly used wheeling calculation methods used by utility companies. A numerical example is provided to illustrate the vector absolute mega-watt mile method that is used by the Electric Reliability Council of Texas Index Terms * INSPEC o Controlled Indexing costing , electricity supply industry , load flow , power system economics , tariffs o Non Controlled Indexing ERCOT , costs , deregulated environment , electric power industry , free market , industrial power systems , risks , vector absolute mega-watt mile method , wheeling calculation methods , wheeling charge f References 1. W. J. Lee and C. H. Lin, "Utility deregulation and its impact on industrial power systems", IEEE Ind. Applicat. Mag., vol. 4, pp. 1998 . Abstract |Full Text: PDF (1628KB) 2. C. F. Chen, A study of the operational issue of the transition and deregulation of Taiwan power industry and systems, with emphasis on system stability, reactive power, and power wheeling, pp. 1996 :Dept. Elect. Eng., Univ. Texas . [Buy Via Ask*IEEE] 3. J. J. Knight, Jr., Customer choice through direct access: Charting sustainable course to a competitive electric service industry, pp. 1995 :California Public Utility Commission . [Buy Via Ask*IEEE] 4. U.S. Congress, Office of Technology Assessments, Electric power wheeling and dealing: Technological consideration for increasing competition, pp. 1989 :U.S. Government Printing Office . [Buy Via Ask*IEEE] 5. A. S. Holmes, A review and evaluation of selected wheeling arrangements and a proposed general wheeling tariff, pp. 1983 :Federal Energy Regulatory Commission . [Buy Via Ask*IEEE] 6. F. C. Schweppe, M. C. Caramanis, R. D. Tabors, and R. E. Bohn, Spot Pricing of Electricity, pp. 1988 :Kluwer . [Buy Via Ask*IEEE] 7. H. M. Merrill and B. W. Erickson, "Wheeling rates based on marginal cost theory", IEEE Trans. Power Systems, vol. 4, pp. 1989 . Abstract |Full Text: PDF (596KB) 8. M. C. Caramanis, R. E. Bohn, and F. C. Schweppe, "The cost of wheeling and optimal wheeling rates", IEEE Trans. Power Syst., vol. 1, pp. 1986 . [Buy Via Ask*IEEE] 9. D. Shirmohammadi, P. R. Gribik, E. T. K. Law, J. H. Malinowski, and R. E. O'Donnel, "Evaluation of transmission network capacity use for wheeling transactions", IEEE Trans. Power Syst., vol. 4, pp. 1989 . Abstract |Full Text: PDF (660KB) 10. H. H. Happ, "Cost of wheeling methodologies", IEEE Trans. Power Syst., vol. 9, pp. 1991 . Abstract |Full Text: PDF (860KB) 11. R. M. Maliszewski, "Transmission made easy", EEI Legal Committee Meeting, pp. 1986 . [Buy Via Ask*IEEE] 12. Y. Z. Li and A. K. David, "Wheeling rates of reactive power flow under marginal cost pricing", IEEE Trans. Power Syst., vol. 9, pp. 1994 . Abstract |Full Text: PDF (532KB) Citing Documents 1. Consideration of an appropriate TTC by probabilistic approach, Audomvongseree, K. Yokoyama, A. Power Systems, IEEE Transactions on On page(s): 375 - 383 , Volume: 19 Issue: 1, Feb. 2004 Abstract |Full Text: PDF (248KB) ON THIS PAGE * Abstract * Index Terms * References * Citing Documents Brought to you by University of Texas at Arlington * Your institute subscribes to: * IEEE/IET Electronic Library (IEL) * What can I access? Terms of Use


Electrical and Computer Engineering | Engineering

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