Evaluation of the marginal outage costs in interconnected and composite power systems

The structure of electric utilities is undergoing dramatic changes as new and expanded service options are added. The concepts of unbundling the electric service and offering customers a range of new services that more closely track actual costs are expanding the options open to customers. Spot pricing provides the economic structure for many of these new service options. An important component of spot prices is the marginal outage cost incurred by customers due to an incremental change in load. This paper presents a formalized approach of calculating the marginal outage cost in interconnected generating systems and composite generation and transmission systems using quantitative reliability techniques. The effects of selected pertinent factors on the marginal outage cost in composite systems are also presented. The proposed methods are illustrated by application to the IEEE-Reliability Test System (IEEE-RTS)