Engineering foundations for the determination of security costs

Power system security is characterized by using distances to system operational limits (including voltage collapse limits, stability limits, line and transformer overloads, and generator limits). It uses the point of collapse method based on the singularity of the power flow Jacobian to define an operational limit boundary in load demand space. Distances to this boundary are then translated into probabilistic measures of likelihood of system failure: probability of normal status, expected demand not served, expected unserved energy, and, ultimately, expected outage cost. Sensitivities of these measures to load and generation changes (important for operational decisions and real-time pricing) are also described. A numerical example is presented. Computational issues are discussed