A spot price based control mechanism for electric utility systems with small power producing facilities

A spot price determination procedure is presented in the context of a small power producing facility (SPPF) control mechanism for utilities under the provisions of the Public Utility Regulatory Policies Act (PURPA). Under the stipulations of PURPA, local utilities must offer to purchase all available excess electric energy at fair market prices from SPPFs which meet the legislative requirements. For a given set of spot prices, and SPPF may optimize its operational schedule in order to minimize its operational costs. Conversely, the utility may establish spot prices which will induce SPPF schedules that reduce its own generation costs. In particular, the utility may offer incentive purchasing spot prices that encourage additional SPPF generation during specific time intervals while respecting regulatory and contractual requirements. The proposed spot price determination procedure utilizes an SPPF comprehensive model, which includes the major electrical and thermal operations of a cogeneration facility