Budget constrained planning to optimize power system reliability

De-regulation and re-regulation are forcing electric utilities to become more cost conscious. At some utilities, this has manifested itself in drastically reduced capital budgets. At the same time, utilities are under great pressure to maintain (and even improve) system reliability. With reduced budgets, it becomes necessary to establish accept/reject criteria that best allocates the budget while obtaining the highest possible system reliability. This paper presents a Budget Constrained Planning method to handle this situation. This method formulates project approvals as a rigorous optimization problem and uses a marginal cost/benefit approach similar to economic dispatch. Budget Constrained Planning is applied to the 1999 discretionary projects fund at Ameren Corporation and results are discussed