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EE 458 Course Objectives M ,W, F 2-3, 1344 Howe Instructors: Professors Jim McCalley, |
2005-2007 Catalog description:
EE/Econ 458. Economic systems for electric power planning. (3-0) Cr.3. F. Prereq: EE 303 or Econ 301.
Evolution of electric power industry. Power system operation and planning and related information systems.
Integer optimization methods. Control technologies and associated planning methods.
Short-term electricity markets and locational marginal prices. Risk management and financial derivatives.
Basics of public good economics. Cost recovery models including tax treatment for transmission investments.
Non-major graduate credit.
Course Supervisor: Jim McCalley
Course Objectives:
Students completing this course will be able to conduct studies in policy, economics, and engineering associated with transmission
expansion for electric power systems and will significantly enhance their skills in using optimization methods for
engineering and economic problem-solving. Central to the course will be methods of cost-recovery systems for transmission
enhancement. The two most representative methods are articulated in the following statements:
Tariff-based cost-recovery model: Transmission expansion projects would be evaluated in
a coordinated planning process to meet the demands
of the region (instead of those of a single utility’s service territory)
at the least overall cost. Projects would be approved provided they
contribute to a reduction in the overall cost of meeting future demand
across the system. Costs of approved projects would be recovered
through regional transmission tariffs over the long term, applied to all
transmission users. The assurance of cost recovery by a regional
authority would allow those constructing the facilities to obtain financing
on reasonable terms.
Market-driven
cost-recovery model: The financial support for a
transmission expansion is derived from
those
who obtain transmission service. Its key assumption is that the financial
commitment of market
participants,
each acting in his own best interests (in this case the combined decisions of
project sponsors and their
subscribers
or customers), will be sufficient to ensure that new transmission is
constructed. Transmission expansion
projects
are initiated when enough entities have concluded that the project benefits
outweigh their financial commitment
and risks. Project sponsors are then
guaranteed transmission rights once the project is completed. Essential to
implementation
of this model are techniques to identify beneficiaries of transmission
expansion projects.
Assessment
of revenues generated for individual power system entities (transmission,
generation, loads)
with
and without such transmission enhancements must be performed to identify such
beneficiaries.