Wheeling rates evaluation using optimal power flows

Real-time pricing of electricity supply functions as a load management tool because it interacts and influences the consumer behavior. This represents a radically different approach to marketing electricity. One area of application of real-time pricing, is in determining wheeling rates. Wheeling, is the transmission of electrical power and reactive power from a seller to a buyer through transmission network owned by a third party. In this paper, a strategy for pricing wheeling power is formulated and evaluated. Unlike other methods which use only the variation of fuel cost for generation, the proposed wheeling pricing algorithm incorporates the optimal allocation of transmission system operating costs based on time-of-use pricing. The transmission costs are obtained by assigning a price k to each unit of reactive and active power flows in the network. The assignment does not discriminate between participants located at differing parts of the network. It is assumed that there is separate ownership of the generating plants and transmission lines. The modeling scheme is applied to the IEEE standard 14 and 30 power systems which involves solving a modified optimal power flow problem (OPF) iteratively using the MINOS package. It is concluded that the method has a potential wide application in wheeling rates of electricity supply.