An Implementation of a Real-Time Retail Electric Power Market Utilizing Optimal Control Strategies

The retail market for electric power does not exhibit the usual behavior of supply and demand. Strict regulation on utility companies restrict the prices consumers can be charged. Allowing the companies to vary the price can afford them the opportunity to pass costs along to the consumers and perhaps help avoid catastrophes such as the California electric crisis. In this paper we analyze a system for a retail electricity market relying on optimal control strategies. In this market the price is allowed to change in real-time, and consumers adjust their power consumption accordingly. Via simulations utilizing the Nonlinear Trajectory Generation software, we analyze two pricing strategies and see the benefit of real-time pricing for the consumer, generator and system reliability in terms of peak load reduction.