Optimum electric utility spot price determinations for small power producing facilities operating under PURPA provisions

An algorithm is presented that allows a local utility to determine a set of spot prices that satisfy all regulatory and contractual restrictions while optimizing the revenues generated from a particular small power-producing facility. This is done under the constraint that the small power-producing facility is independently optimizing its own schedule while taking full advantage of the Public Utilities Regulatory Policies Act (PURPA) provisions. The proposed method fully addresses the delicate problem of potential multiplicity of optimum scheduling solutions. This is done using modified optimum spot prices, where the desired accuracy of the final spot prices can be explicitly taken into account. An example is provided to help illustrate the concepts described