Effective design of the reward-penalty schemes to reach the highest persuasiveness in selecting investment strategies by electric distribution utilities

Modarresi, Mohammad Sadegh; Fotuhi‐Firuzabad, Mahmud

doi:10.1049/cp.2012.0844

Cited by 2 publications

(2 citation statements)

References 7 publications

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“…Applying a dead zone with the mean of the historical reliability data as the center of the zone was recommended in Jooshaki (2014), Mohammadnezhad-Shourkaei andFotuhi-Firuzabad (2011), Modarresi and Fotuhi-Firuzabad (2012), Alvehag and Awodele (2014), Fumagalli et al (2007). Given this strategy, the dead zone size is two times the standard division with the end goal that the 'mean ?…”

Section: Comparative Analysis and Discussionmentioning

confidence: 99%

Cubic reward penalty structure for power distribution companies

Sumesh

Potdar

Krishna

2019

Int J Syst Assur Eng Manag

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An important significance of restructuring in power industry is the emergence of regulatory performance indices in the power distribution companies. Reward-penalty scheme is a direct control method that regulators use to assure the performance regulatory controls such as system reliability, service efficiency, and customer interruption cost. It is used as a financial tool designed to prevent the service reliability and efficiency deterioration of power distribution companies. Reward penalty scheme rewards the distribution company which provides good reliable power and penalizes those who act otherwise. In this paper, we propose a Cubic Reward-Penalty scheme, to improve the service reliability of power distribution companies. The novel feature of this scheme is the use of cubic reward/ penalty formulation which varies in a cubic fashion based on the behavior of the performance-based reliability. In this paper, two methods of implementing Cubic Reward-Penalty scheme are explained: CRPS with no dead band and no reward/penalty capping and CRPS with dead band and reward/penalty capping. These proposed approaches are mainly intended for the regulators who are concerned about the customers affected by the outage duration. The significance of this research, lies in encouraging power distribution companies, to maintain, or even improve, customer service and satisfaction, by developing the Performance Regulatory Reward-Penalty schemes. This paper also provides most of the requirements and design rationale of Cubic Reward-Penalty Structure, its theoretical foundation and its prototype implementation.

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Section: Comparative Analysis and Discussionmentioning

confidence: 99%

Cubic reward penalty structure for power distribution companies

Sumesh

Potdar

Krishna

2019

Int J Syst Assur Eng Manag

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“…Forth, the electric customers do not have the choice of their desired level of quality compared to other clients of other commodities. Thus, they are forced to get electricity with the quality provided by the supply network inevitably 21,22 . Therefore, it is fairer to conduct a comparison based on non‐controllable characteristics.…”

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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Effective design of the reward-penalty schemes to reach the highest persuasiveness in selecting investment strategies by electric distribution utilities

Cited by 2 publications

References 7 publications

Cubic reward penalty structure for power distribution companies

Cubic reward penalty structure for power distribution companies

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

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