Quality of Service Provision in Electric Power Distribution Systems Through Reliability Insurance

Fumagalli, Elena; Black, Jason; Vogelsang, Ingo; Ilić, Marija

doi:10.1109/tpwrs.2004.831294

Cited by 61 publications

(44 citation statements)

References 6 publications

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“…This indirectly rewards the distribution companies for higher quality, since capital expenditures can be used to improve reliability, but result in higher costs as well. Consequently, consumers may pay more for reliability than they desire (Fumagalli et al 2004). Most deregulated distribution companies around the world, including the Brazilian agency ANEEL (2000), have adopted PBR-based schemes considering only penalties.…”

Section: Reliability Insurance Discussionmentioning

confidence: 99%

“…Incomplete information severely limits the efficiency of financial incentive schemes. Regulators do not possess perfect information on the utility costs or consumers benefits (Fumagalli et al 2004).…”

Section: Reliability Insurance Discussionmentioning

confidence: 99%

“…The concept of Reliability Insurance (RI) (Weddendorf 1968;Fumagalli et al 2004) seems to be an interesting way of solving most of the limitations of ROR, PBR, and CSDP schemes. Through RI contracts, a premium is paid by the costumers and a corresponding level of coverage can be provided by the distribution utility.…”

Section: Reliability Insurance Discussionmentioning

confidence: 99%

“…Reliability insurance is not a new concept and it has been around for many years, not only related with equipment performance but also with power interruptions (Weddendorf 1968). Recently, as power distribution utilities started being re-regulated, this discussion has emerged (Fumagalli et al 2004) again. This paper proposes, firstly, the development of a methodology based on chronological MCS, which combines system states selection concepts and minimal cut sets to predict the average values of penalties and bonuses of distribution systems.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Reliability indices applied to performance-based mechanisms in electric power distribution systems

Silva

Nascimento

Guimaraes

et al. 2010

Int J Syst Assur Eng Manag

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Power system failures are random events and their prevention can be managed by the regulatory agencies through pre-established performance targets. Once a standard or target is established for a certain performance index, it is assumed to be the limit value that must not be overstepped or it may cause penalties for the utility. Penalty based schemes, although very popular among regulatory agencies, are very limited to provide efficient economic signals for investments in reliability. This work discusses, firstly, how reliability indices can be fully used through performance-based mechanisms to establish contracts that reward a utility for providing good reliability and/or penalize it for poor services in electric power distribution systems. These contracts can be established between the regulatory agencies and the utilities in the form of performance-based rates (PBR) and between a utility and a customer in the form of customer service disruption payments. Such mechanisms must provide incentives for those utilities that invest in improvements of their system reliability and penalize the ones that do not act the same way. This discussion is extended to cope with tariffs and possible insurances based on reliability performance, so that consumers may share the risks with utilities by paying differentiated price services. The proposed concepts, PBR methodologies, and assessment tools are applied to a small test system (IEEE-RBTS) and the results are discussed.

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Section: Reliability Insurance Discussionmentioning

confidence: 99%

Section: Reliability Insurance Discussionmentioning

confidence: 99%

Section: Reliability Insurance Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Reliability indices applied to performance-based mechanisms in electric power distribution systems

Silva

Nascimento

Guimaraes

et al. 2010

Int J Syst Assur Eng Manag

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“…The levels of DP seen by the system users closely affect the levels of reliability and security provided to them and to the system as a whole. Examples of deciding the levels of reliability and security are discussed in reference [4], and it is also a part of our ongoing work [5].…”

mentioning

confidence: 99%

Determining the cost of dynamic control capacity for improving system efficiency

Elizondo

Ilić

Mercado

2006

2006 IEEE Power Engineering Society General Meeting

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Abstract-In this paper, we propose an approach to determining the cost of supplying the dynamic control capacity (DCC) necessary to ensure that the system operates without stability problems over a well-defined range of demand variations and system contingencies. This approach addresses the problem of finding an economically efficient combination of controllers and reserves to provide reliability and security economically and in a technically adequate way. In particular, we discuss the cost of providing DCC as a function of system dynamic performance (DP) metrics. The choice of performance metrics is critical for deciding the installation of controllers in power systems. In this paper, we illustrate the approach using the primary control problems of transient stability and primary voltage control.

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Stochastic investment model for custom Voltage‐Sag‐Preventing service considering service price and punitive damages of contract

Zhou

et al. 2019

IEEJ Transactions Elec Engng

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Custom power quality (PQ) plays a significant part in improving PQ in distribution networks and hedging economic losses for power‐quality‐sensitive electricity users. In an electricity market with multiple power companies competing with each other, for a power company, providing custom PQ with proper service prices becomes a key element to maximize its total economic profit and improve competitiveness. In this work, with a focus on the voltage sag (VS) problem, a stochastic investment model for installing voltage‐sag‐preventing equipment is proposed. First, basic cost–benefit models are established from the perspectives of power companies and electricity users. Then, considering uncertainties in providing power with an expected number of voltage sags resulting from equipment failure and so on, proper pricing mechanisms and punitive damages of service contracts are analyzed accordingly. With each mechanism, the stochastic investment decision‐making model is formulated with the goal of maximizing a power company's economic profit during the life cycle of voltage‐sag‐preventing equipment. The influences of different factors on the economic benefits of the investment are analyzed in a case study, including the compensation coefficient, investment cost, and failure uncertainties, providing a reference for decision‐making for investment in and possible pricing of custom VS services. © 2019 Institute of Electrical Engineers of Japan. Published by John Wiley & Sons, Inc.

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Quality of Service Provision in Electric Power Distribution Systems Through Reliability Insurance

Cited by 61 publications

References 6 publications

Reliability indices applied to performance-based mechanisms in electric power distribution systems

Reliability indices applied to performance-based mechanisms in electric power distribution systems

Determining the cost of dynamic control capacity for improving system efficiency

Stochastic investment model for custom Voltage‐Sag‐Preventing service considering service price and punitive damages of contract

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