A Framework for Security Pricing in a Re-regulated Environment

| A framework for static security pricing in a re-regulated utility environment is presented. The eventual goal is to determine the marginal value of security resources, such as spinning reserve, voltage support, ramp rate ability, etc., in maintaining system security. The basic problem statement is presented in a form already decomposed into a master problem and contingent subproblems, which are amenable to solution using methods based on Bender's decomposition. Basic assumptions in the framework are discussed, and an example is given to illustrate the diierences between the proposed framework and other approaches to operate the system in an optimal manner, subject to static security considerations.