Determining the cost of uncertainty to electric utilities in serving highly varying loads

In those cases where load fluctuations are small, a utility or independent system operator (ISO) may not incur significant costs in meeting these loads. In contrast, a utility confronted with large load variations due to industrial customers can experience significant costs in order to maintain system parameters. Therefore, highly varying load (HVL), containing uncertain components which are observable in short-term and realtime operations, generally results in the incremental cost in order for the electric utility to meet its customer demand without compromising electric power quality and reliability. The purpose of this study is to present a framework for measuring costs of uncertainty by considering system control and financial market functions and decisions in parallel with any activity that a utility anticipates HVL. The methods for cost measurement are also provided in order to assess the impacts of HVL in terms of costs of uncertainty in short-term and real-time operations.