Optimal strategy to split firm and recallable available transfer capability in the deregulated environment

Available transfer capability (ATC) is important public information for transaction participants in the deregulated power industry. Transmission providers may use ATC to make the best utilization without comprising system security. Considering various contingencies, ATC can be utilized as the sum of the firm (or nonrecallable) transmission service capacity and the recallable (or interruptible) transmission service capacity. The object of this paper is to propose an optimal strategy to spilt firm and recallable transmission service capacity considering possible failures of power system equipment, and uncertainty in load demands. We propose the expected ATC to define the firm transmission capacity. The expected ATC can be obtained either from the analytical contingency analysis or from statistic estimations of ATC under contingencies. The problem is formulated as an optimization problem where the wheeling revenue is considered as an objective function. Effects of wheeling costs and interrupting penalty variations on the wheeling revenue are also investigated using sensitivity analysis.