A risk-based model for performance-based regulation of electric distribution companies

This paper aims at proposing a mixed-integer linear formulation to incorporate reliability oriented costs into the expansion planning model of electricity distribution networks. In this respect, revenue lost associated with the undelivered energy caused by network interruptions, as well as costs incurred by the widely-used reward-penalty regulations are considered as the major reliability related costs from distribution companies point of view. A set of mixed-integer linear equations is proposed to calculate the most common distribution system reliability indices, i.e. EENS, SAIFI, and SAIDI. It is found that these equations can also facilitate the formulation of radiality constraint in the presence of DG units. Moreover, application of the proposed method is investigated through various case studies performed on two test distribution networks with 24 and 54 nodes.

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“…General shape of reward-penalty scheme is illustrated in Fig. 2 [18][19][20]. Benchmark value implies acceptable value of the reliability index.…”

Section: Reliability Related Costsmentioning

confidence: 99%

MILP Model of Electricity Distribution System Expansion Planning Considering Incentive Reliability Regulations

Jooshaki

Abbaspour

Fotuhi‐Firuzabad

et al. 2019

IEEE Trans. Power Syst.

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“…The results of this scheme show that the incentive regulatory motivates the distribution companies to maintain and improve their service reliability. In Reference 25, a risk‐based model was proposed to assess the parameters of reward and penalty structure in the first regulatory period. In Reference 26, a new fuzzy‐based design model for application of reward and penalty structures in the distribution sector was introduced.…”

Section: Introductionmentioning

confidence: 99%

A hierarchical approach to designing an electricity distribution reward‐penalty scheme for service quality improvement

Ghasemi

Dashti

Amirioun

2021

Int Trans Electr Energ Syst

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In each regulatory period, the parameters of the reward and penalty scheme (RPS) vary based on the investment made by electricity distribution companies (EDCs) and imposed costs. In this paper, a novel dynamic model for determining the RPS parameters for each EDC is presented. This new model has three stages: (i) determination of the RPS parameters for the first regulatory period, (ii) the RPS decision-making model, and (iii) determination of the RPS parameters for the subsequent regulatory period. The proposed model was implemented for Iranian EDCs. Results verified the effectiveness of the proposed model in enhancing distribution system reliability.

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“…Nevertheless, this approach does not necessarily guarantee an equal reliability level for similar customers, which are located in different areas but are subject to identical external conditions 16‐18 . Traditional reliability incentive regulations identically treat different customers located in different geographic areas and even in the territory of diverse DISCOs 19,20 .…”

Section: Introductionmentioning

confidence: 99%

Reliability incentive regulation based on reward‐penalty mechanism using distribution feeders clustering

Khonakdar-Tarsi

Fotuhi‐Firuzabad

Ehsan

et al. 2021

Int Trans Electr Energ Syst

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Summary This paper proposes an approach to enhance the reliability regulation based on the relative performance. In the proposed approach, the distribution system feeders are clustered based on the parameters, which cannot be controlled by distribution companies. Afterward, a reliability incentive regulation is applied to each cluster so that the performance of each feeder is compared to its counterparts in the same cluster. The quality regulation is designed based on the reward‐penalty mechanism, which penalizes feeders whose performance is worse than a benchmark and rewards those providing a performance higher than the benchmark. Then, the reward and penalty associated to the electric distribution company are determined to summarize the rewards and penalties for all feeders. Having this approach implemented, utilities compete to make more profits by serving customers at higher reliability levels. To assess the effectiveness of proposed method, it is applied to a real distribution network containing 194 feeders.

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A risk-based model for performance-based regulation of electric distribution companies

Cited by 17 publications

References 23 publications

MILP Model of Electricity Distribution System Expansion Planning Considering Incentive Reliability Regulations

MILP Model of Electricity Distribution System Expansion Planning Considering Incentive Reliability Regulations

A hierarchical approach to designing an electricity distribution reward‐penalty scheme for service quality improvement

Reliability incentive regulation based on reward‐penalty mechanism using distribution feeders clustering

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