PWP-072 Priority Network Access Pricing for Electric Power

We propose a priority-pricing scheme for zonal access to the electric power grid that is uniform across all buses in a zone. The Independent System Operator (ISO) charges bulk power traders a per unit ex ante transmission access fee. The zonal access fee serves as an access insurance premium that entitles a bulk power trader to either physical injection of one unit of energy or a compensation payment. The access fee per MWh depends on the injection zone and a self-selected strike price that serves as an insurance \deductible" that determines the scheduling priority of the insured transaction and the compensation level in case of curtailment. Inter-zonal transactions are charged (or credited) with an additional ex post congestion fee equal to the di erences in zonal spot prices. The compensation for curtailed transactions equals the di erence between the realized zonal spot price and the selected strike price (deductible level). The ISO manages congestion so as to minimize net compensation E-mail: [email protected]; URL: http//www.isye.gatech.edu/~deng E-mail: [email protected]